Is Palantir Leading An AI Arms Race? One Analyst Says 'A Star Is Born,' Others Disagree

Shares of Palantir Technologies Inc PLTR tanked in early trading on Tuesday, even after the company reported strong second-quarter results.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

• Raymond James analyst Brian Gesuale maintained an Outperform rating, while raising the price target from $18 to $22.
• Goldman Sachs analyst Gabriela Borges reiterated a Neutral rating and price target of $11.
• RBC Capital Markets analyst Rishi Jaluria reaffirmed an Underperform rating and price target of $5.
• Wedbush analyst Daniel Ives maintained an Outperform rating and price target of $25.

Check out other analyst stock ratings.

Raymond James: Palantir reported “solid” second-quarter results, raised its guidance and announced a $1 billion buyback program, Gesuale said.

“More importantly, the company is building AIP (Artificial Intelligence Platform) customer momentum faster than our 2025 high-on-the Street model contemplated,” with AIP users “spanning 100 organizations and another 300 organizations in active discussions,” the analyst wrote.

Goldman Sachs: Palantir’s guidance implies that revenue growth will accelerate in both the third and fourth quarters, on a sequential and year-on-year basis, Borges said.

“AIP is generating significant client interest,” the analyst wrote. “Palantir noted that there are already 100+ organizations using AIP with over 5,000 monthly active users growing 50% month-over-month."

RBC Capital Markets: “Q2 revenue growth decelerated ~500 bps to 13%,” in-line with the consensus estimates, Jaluria stated. “Both Commercial and Government revenue decelerated ~400 bps,” he wrote, while adding that leading indicators “do not look encouraging.”

“While lumpy government revenue could explain the planned acceleration, we are concerned that the guide could be assuming contribution from AIP without a monetization strategy (plus we remain skeptical of the perception of Palantir as a GenAI beneficiary),” the analyst further said.

Wedbush: “June results came in strong with AIP front and center generating traction in the field while increasing overall customer count ~38% y/y,” Ives wrote in a note.

“A Star is Born — it's called AIP,” the analyst stated. “With a raise in FY23 guidance, significant increase in customer count, strong performance, and the AI arms race well underway, we continue to believe Palantir is the gold standard in AI and are confident in the company’s efforts to expand into the commercial space while maintaining its massive government presence,” he added.

PLTR Price Action: Shares of Palantir Technologies had risen by 8.59% to $16.44 at the time of publication Tuesday.

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