Should You Buy Palantir Stock? Wall Street Gives a Clear Answer That May Surprise Investors.

Palantir Technologies (NYSE: PLTR) has been one of Wall Street’s hottest artificial intelligence (AI) stocks this year. Shares have surged over 150% in 2024 amid enthusiasm about AI, encouraging financial results, and the company’s inclusion in the S&P 500 (SNPINDEX: ^GSPC).

Somewhat surprisingly, Wall Street is overwhelmingly bearish after that tremendous price appreciation. Among the 23 analysts that follow Palantir, the median price target is $27 per share, which implies 38% downside from its current share price of $43.50. In other words, most analysts believe Palantir is overvalued.

Here’s what investors should know about the company.

The bull case: Palantir is a leader in artificial intelligence software

Palantir helps businesses make sense of data. Its primary platforms, Gotham and Foundry, let users ingest information, develop machine learning models, and surface insights with analytical applications that improve decision-making. The company has also introduced its Artificial Intelligence Platform (AIP), which brings support for large language models and generative AI to Gotham and Foundry.

Some analysts have praised Palantir. In August, Forrester Research recognized its leadership in machine learning and artificial intelligence platforms. “Palantir is quietly becoming one of the largest players in this market,” analysts wrote. And Palantir achieved the highest ranking in Dresner Advisory Services’ most recent report on artificial intelligence, data science, and machine learning software vendors.

However, other analysts are less impressed. Gartner scored Palantir below a dozen other vendors for its data integration tools, and did not even consider Palantir in its latest report on data science and machine learning platforms. And last year, RBC Capital analyst Rishi Jaluria opined that Palantir’s software “does not appear to be anything truly differentiated when it comes to generative AI.”

Those disagreements notwithstanding, Palantir reported encouraging financial results in the second quarter. Its customer base increased 41% and the average customer spent 14%…

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