Palantir Jumps as AI, Government Deals Fuel Confidence Despite Lofty Valuation
April 10 - Palantir Technologies (NASDAQ:PLTR) led a sharp rebound in tech stocks on Wednesday, soaring 19% as investors responded to optimism over a potential tariff pause. The Nasdaq Composite jumped more than 12% in the session, marking a dramatic reversal in market sentiment.
The data analytics firm has seen renewed interest as investors weigh its sticky AI-driven government contracts and commercial expansion. Palantir peaked near $124 in mid-February, up nearly 300% over one year, and now it remains about 26% off its 52-week high.
Palantir reported a 2024 revenue of $2.87 billion, up 29% year-over-year, with U.S. commercial sales climbing 64% in Q4. Adjusted earnings for the year rose 75% to $0.41 per share, topping estimates. The company posted a record Q4 free cash flow of $1.25 billion and achieved profitability on a GAAP basis.
Looking to 2025, Palantir forecasts 31% revenue growth with Q1 revenue guidance between $858 million and $862 million. Despite strong fundamentals, analysts maintain a Hold rating, citing its elevated forward P/E of 138x and P/S of 48x, well above industry medians.
Shares remain well above the consensus target of $90, though a street-high estimate of $125 suggests a potential 35% upside.
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