Palantir Stock Surges, Outperforming Nasdaq and Industry Peers

Palantir Technologies (PLTR) has reignited its upward momentum in 2024, continuing its impressive performance from last year. The AI software company led by CEO Alex Karp has seen its shares soar 41% year-to-date, outpacing the 3% gain of the Nasdaq Composite (^IXIC).

Financial Performance Drives Stock Surge

Palantir's financial performance has fueled its stock surge. The company reported a 52% year-over-year increase in US revenue in the fourth quarter of 2024. Commercial and government sales grew 64% and 45%, respectively. Adjusted operating profit margins climbed to 45% from 34% a year earlier.

Adjusted operating profits nearly doubled in 2024 to $1.13 billion. CEO Karp attributed the company's success to its ability to empower enterprises with its culture and technology, particularly by enabling them to leverage large language models.

Analysts Upbeat Despite Premium Valuation

Wall Street analysts have responded positively to Palantir's results, revising EPS expectations for 2025 and 2026 higher. However, some experts caution that the company's premium valuation and high volatility remain a concern. Palantir trades at a forward PE ratio of 181, in contrast to Nvidia (NVDA)'s 29 times estimated forward earnings.

Despite the valuation concerns, analysts see significant potential in Palantir. Wedbush analyst Dan Ives compares the company to Oracle and Salesforce, projecting a similar growth trajectory over the next three to five years.

Expert Views on Sustainability

Analysts differ on the sustainability of Palantir's growth. Morgan Stanley analyst Sanjit Singh argues that the company's rare combination of 30% growth and strong technology platform justifies its valuation. On the other hand, Gil Luria at DA Davidson maintains a Neutral rating due to Palantir's unprecedented premium to its peers.

RBC Capital Markets analyst Rishi Jaluria remains bearish, citing concerns about the runway for growth and product differentiation. Jaluria's $40 price target implies a 68% decline from current levels.