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Palantir’s All-Star Lineup: Why PLTR Belongs Alongside NVDA and MSFT in Your AI Portfolio

Palantir Technologies (NYSE:PLTR) stock has had a very strong price performance over the past year. Shares have more than tripled. However, to attribute this solely to “AI hype” is a short-sighted take. Any supposed “hype” is far outweighed by this AI software company’s bona fide growth catalysts stemming from this trend.

The company is already starting to tap into growing commercial demand for AI enterprise software. Soon, governmental demand could re-accelerate as well. Plantir is poised for strong revenue and earnings growth, leading to a positive performance.

PLTR Stock: AI Boom a Boon

Recently, we discussed how strong quarterly results have played a big role in keeping PLTR on an upward trajectory. A key takeaway from Palantir’s latest numbers was that the AI boom has been a boon for the company’s sales to commercial customers.

During the quarter ending Dec. 31, 2023, commercial revenue increased 70% year-over-year. Customer count increased 55% year-over-year, and by 22% on a sequential (quarter-over-quarter) basis.

These results provide a strong indication that the rollout of the company’s Artificial Intelligence Platform is translating into actual growth.

This hasn’t been universal among all AI software companies. As InvestorPlace’s Samuel O’Brient reported March 9, Wedbush’s Dan Ives raised his PLTR stock price target, from $30 to $35 per share, following Palantir’s AIPCon event held last week.

Ives noted that because of the AIP Platforms and other factors, the company “is in the sweet spot to monetize a tidal wave of enterprise spend.”

Palantir’s governmental business grew at a far slower pace last quarter. Government revenue increased by 11% year-over-year, by 5% on a sequential basis. However, the segment that has been the company’s longtime bread and butter could soon experience a resurgence of its own.

Another Growth Catalyst in Motion?

While the main focus right now with PLTR stock is the company’s commercial growth, there’s no reason to write off Palantir’s government segment.

As seen with recent contract wins, such as the win of a $178.4 million contract with the U.S. Army, Palantir keeps tapping into the increased use of AI and machine learning technology in modern warfare.

Moreover, as InvestorPlace’s Dana Blakenhorn recently argued, while not certain, geopolitics may be something else that is helping send PLTR to higher prices.

According to Blankenhorn, the recent increase in geopolitical conflicts highlights a potential catalyst known as the “automation of war.” If U.S. military spending increases at a faster pace due to rising threats around the globe, Palantir is well-positioned to benefit.

With this in mind, it makes even more sense that some analysts, like HSBC’s Stephen Bersey, are calling for the company to experience an elevated level of overall growth over the next few years. Bersey, for instance, forecasts total earnings growth of 24% between now and 2028.

Bottom Line on PLTR Stock

Between a crystal-clear indication of a commercial sales resurgence, and a possible driver of a governmental sales resurgence, Palantir appears set to stay in high-growth mode for years to come.

There are stocks being irrationally boosted higher from the AI trend, but alongside these more speculative names, are shares in the companies both boosted by the trend, yet that are also already beginning to report stronger results/higher growth thanks to this trend.

PLTR is this latter category, which includes names like AI chips powerhouse Nvidia (NASDAQ:NVDA, as well as Microsoft (NASDAQ:MSFT), which like Palantir has quickly capitalized on rapidly increasing demand for artificial intelligence software.

Alongside these other AI winners, be sure to make room for PLTR stock in your portfolio.

PLTR stock earns an A rating in Portfolio Grader.

On the date of publication, Louis Navellier held PLTR, NVDA, and MSFT. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

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