Palantir initiated at Market Perform due to enterprise AI: Northland

Palantir (NYSE:PLTR) was initiated at Market Perform by Northland Capital, as it considers the Denver-based big data firm a leader in the enterprise artificial intelligence market.

Palantir inched up 1% during early market action on Thursday.

“GenAI has lit a fire under companies to employ AI,” said Northland Capital analyst Michael Latimore. “Initial work, however, has been fragmented and experimental. Palantir’s AI operating system, powered by their Ontology software, overcomes myriad roadblocks to adoption and is igniting AI use across the enterprise landscape.”

Palantir Ontology creates an operational layer for an organization. Palantir defines it as a “digital twin” of a business. It is intended to develop use cases and facilitate better decision-making at scale.

“Palantir doesn’t just automate insight creation, but also decisions, the next wave of AI,” Latimore added.

Northland established a price target of $35 on Palantir, which is 7% above its latest closing price.

“Northland estimates Palantir to hit 59 on the rule of 40 in FY24 and 57 in FY25,” Latimore said. “This top-tier metric suggests PLTR should be able to trade at 22x revenue in a year, putting the stock at $35.”

The stock has a Buy rating from Seeking Alpha analysts, but a Hold rating from both Wall Street analysts and Seeking Alpha’s Quant system, which routinely beats the market.