Palantir Stock Forecast 2025: A ‘Buy’ on Further AI Growth?

Palantir Technologies (PLTR) has seen its stock price soar this year on the back of strong quarterly results – but some analysts fear it’s now unsustainably high.

Shares in the US-based company, which specializes in software platforms for big data analytics, rose 60% from $16.44 at the start of 2024 to $26.36 in February 2024.

And even though the price has since slipped back to $22.47 as the market closed on April 4, 2024, industry observers are divided on whether it’s overvalued.

Palantir (PLTR) Stock Performance YTD. Source: TradingView

In our Palantir stock forecast 2024-2025, we’ll look at the factors influencing the PLTR stock price and how the company, which hit the list of the best tech stocks to watch in 2024, is being affected by its chief executive’s views on Israel.

Key Takeaways

  • Palantir’s stock price rose 60% this year on the back of strong quarterly results.
  • Although the PLTR stock price slipped back to $22.47 as the market closed on April 4, 2024, it still sees 36% gains year-to-date.
  • Chief executive Alex Karp revealed some employees have left the business due to his public support for Israel.
  • Wall Street analysts are divided on the PLTR stock. Some regard it as a ‘buy’ or ‘hold,’ while others recommend investors ‘sell.’
  • Palantir has performed exceptionally well but is likely to face intense competition from rivals in the artificial intelligence space.

Palantir Stock Analysis: Key Drivers to Consider

Any PLTR stock forecast needs to give an overview of the business.

Palantir builds software that enables organizations to create and run artificial intelligence across both public and private networks.

The company, whose clients include the US government, is behind products such as Palantir Foundry, Palantir Gotham, and Palantir Apollo.

These are used in areas as diverse as anti-money laundering, defense, data protection, and cryptocurrency.

For example, last November, Palantir won an NHS England contract worth more than £300m ($381m) to develop a new patient platform.

Here, we take a look at the crucial factors that are likely to influence the future direction of the PLTR stock price.

Palantir (PLTR) Stock All-Time Performance. Source: TradingView

Strong Quarterly Results

Let’s start with how the company is performing. Palantir’s stock price was given a massive boost after it delivered better-than-expected fourth-quarter results.

It revealed that full-year 2023 revenue grew 17% year-over-year to $2.23 billion, with commercial revenue up 20% to $1 billion and government revenue growing 14% to $1.2 billion.

The results also showed a GAAP net income of $210 million, representing a 9% margin, as well as an adjusted free cash flow of $731 million.

Malik Ahmed Khan, an equity analyst at Morningstar, branded them “strong results” and pointed out there was good momentum for its artificial intelligence platform in the US commercial market. He wrote:

“We see this as a promising leading indicator, since these customers are often early adopters of software solutions, ahead of their global peers.”

Focus on the Future

In his annual letter to shareholders, Palantir chief executive Alex Karp declared the company’s expansion and growth had never been greater.

“We generated $2.23 billion in revenue last year, an increase of 17% over the prior year, when our business generated a total of $1.91 billion,” he wrote.

Palantir Total Revenue.
Palantir Total Revenue. Source: Palantir

He also pointed out that the fourth quarter had seen a profit of $93 million, meaning 2023 was its first profitable year since it was founded in 2003.

Karp attributed the strong results to the “strength of our software” and the “surging demand” being seen across industries and sectors for artificial intelligence platforms.

“The demand for large language models from commercial institutions in the United States continues to be unrelenting,” he added. “Every part of our organization is focused on the rollout of our Artificial Intelligence Platform (AIP), which has gone from a prototype to a product in months.”

Views on Israel

However, it hasn’t been all plain sailing for Karp. Earlier this month, he admitted in an interview that the company had lost employees over his public support for Israel.

“We’ve lost employees. I’m sure we’ll lose employees,” he said. “If you have a position that does not cost you ever to lose an employee, it’s not a position.”

In a letter to shareholders last November, Karp had reiterated his support for Israel in the ongoing conflict.

“We are one of a few companies in the world to stand up and announce our support for Israel, which remains steadfast,” he wrote. “Palantir stands with Israel.”

Palantir Stock Forecast 2024-2025: Analysts’ Views

So, what are the Palantir stock predictions of analysts and industry observers?

Susannah Streeter, head of money and markets at Hargreaves Lansdown, believes the outspoken Karp’s views may cause more personnel problems.

She told Techopedia:

“It could throw up recruitment challenges given that the fight for talent in the AI industry, to keep powering new innovations, is still super-strong.”

More broadly, however, Streeter acknowledged that Palantir was successfully providing the platforms that enable AI tools to be used effectively.

“In the defense realm, this would include analyzing data on energy targets and developing military strategies to help officers plan campaigns,” she said. “In the corporate world it enables executives to analyze other businesses and come up with plans to compete more effectively and drive efficiencies.”

While Palantir faces competition from well-resourced rivals, such as Microsoft (MSFT) and Amazon (AMZN), its innovative sales techniques help potential customers work out how AI could work for them.

“Its immersive bootcamps enable clients to test out the platforms and work out use cases for the technology within their companies,” she said. “This strategy appears to be paying off handsomely so far, helping fire up lead generation and cash flow but it’s still going to have to pedal hard to keep those customers sticky amid fierce competition.”

Dan Ives, a managing director and senior equity research analyst at Wedbush Securities, recently raised his Palantir share price forecast from $30 to $35.

Later on April 5, Ives expressed a positive view on the tech sector stocks after the upcoming Q1 earning results.

According to Danni Hewson, head of financial analysis at AJ Bell, everyone seems to be looking for the next Palantir due to its recent success.

“This is a company whose share price has surged almost 200% in a year and increased customer count by 35% in 2023, although the revenue growth didn’t quite meet those heady levels,” she told Techopedia.

While Hewson acknowledged there would be caution around the stock, she remains optimistic.

“There will undoubtedly be some thinking that the current trajectory can’t be maintained, this is a company with a solid product in the sexiest of investment spaces,” she said. “With the AI boom not going anywhere, Palantir seems to have plenty of gas in the tank for the long haul.”

However, Malik Ahmed Khan, an equity analyst at Morningstar, has a fair value estimate of $15 on the stock, which is considerably less than its current stock price.

“There appears to be a clear delineation between the fundamentals-focused perspective on Palantir and how the street is valuing it,” he wrote. “We are very bullish on the firm, but we cannot justify its current market price.”

Palantir Historical Price/Fair Value Ratio.
Palantir Historical Price/Fair Value Ratio. Source: Morningstar

Looking ahead, Khan expects revenue will see a 21% compound annual growth rate over the next five years as it expands both its governmental and commercial operations.

“We expect the majority of this top-line growth to be driven by commercial clients as the company seeks to broaden that base,” he explained.

However, there are potential downsides to consider.

“While Palantir has landed high-value commercial and government clients over the years, we have found the executive team’s execution to be questionable at best,” he said. “The firm’s sales strategy has led to relatively poor customer acquisition.”

Palantir Stock Predictions 2024-2025: Where Will the PLTR Price Go Next?

There is currently a rating of ‘Reduce’ on Palantir stock as of April 5, 2024, according to the views of 12 Wall Street analysts compiled by MarketBeat.

Five of them have ‘Hold’ recommendations in place, and four see the stock as a ‘Sell,’ while three analysts view it as a ‘Buy.’

Palantir Stock Forecast 2024

Date Analyst Action Rating
Change
Price Target
Change
Percentage
Change
3/28/2024 Monness Crespi & Hardt Downgrade Neutral ➝ Sell $20.00 -18.37%
3/8/2024 Wedbush Reiterated Rating Outperform $30.00 ➝ $35.00 +30.79%
3/7/2024 Mizuho Boost Target Neutral ➝ Neutral $18.00 ➝ $21.00 -19.66%
3/6/2024 Bank of America Boost Target Buy ➝ Buy $24.00 ➝ $28.00 +5.14%
2/14/2024 HSBC Downgrade Buy ➝ Hold $22.00 -8.41%
2/6/2024 Royal Bank of Canada Reiterated Rating Underperform ➝ Underperform $5.00 -76.09%

Source: MarketBeat, as of April 5, 2024

As the stock market closed on April 4, 2024, the stock price stood at $22.47.

However, the consensus view is that the stock price may fall 18% to $18.35 over the coming year.

While the most optimistic analysts believe it could rise further to $35, the more pessimistic fear a devastating collapse to just $5.

But what about a Palantir stock forecast 2025? According to the algorithmic forecasts of Wallet Investor as of April 5, 2024, the stock could rise to $33.063 over the next 12 months.

Palantir (PLTR) Stock Forecast 2025. Source: Wallet Investor

The site’s five-year Palantir stock forecast, meanwhile, has PLTR stock price rising to a remarkable $74.95.

The Bottom Line: Should I Invest in Palantir?

Palantir has performed extremely well recently. Revenue is up and the stock price has soared in response.

It’s also operating in a booming area with huge potential. No one doubts that artificial intelligence is likely to play a massive role in all of our futures.

However, our PLTR stock forecast does highlight how analysts are divided. While they all recognize the potential, some are concerned that Palantir stock has become overvalued.

The final decision as to whether an investment in Palantir makes sense will be down to your own analysis and conclusions. Remember that you should never invest more than you can afford to lose.

Do your own research and always remember your investment decision depends on your attitude to risk, your expertise in the stock market, the spread of your portfolio, and how comfortable you feel about losing money.

The information in this guide does not constitute investment advice and is meant for informational purposes only.

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Rob Griffin
Financial Journalist

Rob is a seasoned journalist with over three decades of experience spanning across business and finance journalism. Before embarking on a freelance career in 2002, he contributed his expertise to the business desks of notable publications such as the The Guardian, Yorkshire Post, Sunday Business (now Business Post), and Sunday Express. Throughout his freelance journey, Rob has been a regular contributor to a wide range of national newspapers, consumer magazines, trade publications, and websites. His work has appeared in titles such as The Independent, Citywire, Daily Express, FT Adviser, and Sunday Telegraph, covering an array of subjects from market trends…