Is PLTR stock a buy? Here’s what technical and fundamental analysis shows about Palantir stock

There is a lot for bulls and bears to compete over Palantir Technologies (belter). The bulls indicate an improvement in PLTR’s earnings. Bears focus on slowing revenue growth. Then there’s the buzz about AI stocks to consider.

Palantir stock fell after its second-quarter earnings report. Quarterly earnings and sales were in line with analyst estimates. But management’s expectations for PLTR stock disappointed some investors. The company also announced a $1 billion buyback of PLTR shares.

PLTR stock hit an intraday 52-week high on Aug. 1 as AI stocks continue to rally. But as of August 28, PLTR stock is down 27% from its 52-week high. However, Palantir stock jumped 130% in 2023.

In addition, the shares are still trading well below the software maker’s all-time intraday high of 45 set in late January 2021.

Is artificial intelligence an engine of growth?

The bulls on PLTR stock point to AI software as a growth engine. Palantir has already exploited the AI opportunity with government customers for intelligence gathering, counterterrorism, and military purposes.

Will Generated AI Spur Growth in the PLTR Stock Trading Market? The software maker has expanded into healthcare, energy, and manufacturing.

In healthcare, it is likely that Palantir customers will be able to use generative AI in applications such as drug discovery. Palantir announced its latest offering, an “artificial intelligence platform,” earlier this year.

Palantir said on a second-quarter earnings call with analysts. Palantir indicated that more than 100 organizations are using its new AI platform. Palantir has not disclosed pricing for its AI products.

“Palantir’s primary goal is to enhance utilization and education, with the goal of later monetization,” Gabriela Borges, a Goldman Sachs analyst, said in a note to clients.

PLTR Stock: The Basics

Meanwhile, Palantir’s management structure gives Karp and co-founder Peter Thiel long-term control of the company through superior voting rights.

The company’s name is derived from the planetery, which are “vision stones” that resemble the crystal ball from the “Lord of the Rings” book and movie series. Palantir means “one who sees from afar”.

In addition, Palantir engineers often customize software to meet customer needs. This increases the time needed to ramp up “digital transformation” projects. So, after Palantir wins the contract, it may take some time to generate revenue.

The Denver-based company offers three platforms. One of them is Palantir Gotham, which is mainly used by government agencies. There is a Palantir Metropolis for banks, financial services companies and hedge funds. Palantir Foundry is used by corporate clients.

Palantir gets approximately 60% of its revenue from government agencies. Slowing revenue growth is a problem. In 2022, revenue growth slowed to 24% from 40% in 2021 and 47% in 2020.

Earnings for the June quarter were 5 cents a share on an adjusted basis. That was in line with analysts’ expectations, and up from a loss of 1 cent in the previous year.

Revenue rose 13% to $533 million. This also achieved the goals of Wall Street. Income included investments in special purpose acquisition companies.

Palantir, based in Denver, said revenue for government customers rose 15% to $302 million, in line with estimates. Commercial customer revenue increased 10% to $232 million.

Furthermore, Palantir has been profitable using generally accepted accounting principles, or generally accepted accounting principles, for three consecutive quarters.

The company’s forecasts for Q3 and fiscal 2023 revenue are roughly in line with expectations.

Palantir makes partnerships

In November 2022, Palantir acquired full ownership of a joint venture in Japan that sells the company’s software. Japanese insurance company Sompo Holdings is the largest customer.

Then, in 2023, Palantir began consolidating revenue from the joint venture in its earnings reports. In addition, the Morgan Stanley report estimates that the project generated an annual operating rate of revenue of $50 million through 2023.

Moreover, Palantir recently expanded its cloud computing partnership with Microsoft (MSFT) targeting government agencies.

To accelerate corporate adoption of AI software, Palantir and IBM have formed a global partnership. Under the deal, Palantir made its Foundry software available to IBM cloud customers. The Foundry platform is a centralized data operating system that allows users to manage, filter, and visualize large data sets.

One problem with PLTR stock is that large US government contracts are about to be renewed.

Also of interest is whether Palantir wins more contracts in the UK from its NHS. The NHS used Palantir during the coronavirus emergency. But an even bigger contract worth €400m, or roughly $426.6m, is now available.

Blantyre stock technical analysis

Palantir’s stock has a relative strength rating of 97 out of the best 99 possible. PLTR stock also carries an IBD composite rating of 95 out of a possible 99, according to IBD stock check.

Meanwhile, the IBD composite classification combines five separate special classifications into one easy-to-use classification. Also, the best growing stocks have a composite rating of 90 or better.

Moreover, institutional ownership has weakened. PLTR stock has an accrual/distribution rating of D-minus, down from A-minus a month ago. This rating analyzes changes in price and volume in a stock over the past 13 weeks of trading. A+ indicates extensive institutional buying; E means heavy sell. Think of grade C as neutral.