Palantir Technologies Inc (NASDAQ: PLTR) is extending losses this morning as macro concerns continue to weigh on US tech stocks.
And while the big data analytics firm may still be “egregiously overvalued”, there are things about PLTR that Paul Meeks, the chief investment officer of Harvest Portfolio, finds “impressive”.
Palantir stock is currently going for about 180 times its estimated earnings for 2025 – and that’s when it has tanked nearly 30% since mid-February.
Even Nvidia, in comparison, is trading at less than 30 times forward at the time of writing.
Palantir has diversified its revenue
Palantir has been quick in diversifying its revenue streams in recent years, which Paul Meeks dubbed “impressive” in his recent interview with CNBC.
In the latest reported quarter, the big data analytics firm saw its US commercial revenue pop a whopping 64% on a year-over-year basis.
According to Harvest Portfolio Management’s expert, cutting reliance on government contracts and switching to commercial customers instead may particularly come in handy for PLTR now that the US administration has plans of trimming the defense budget significantly.
Additionally, Palantir closed some 129 deals worth $1 million or more in its fiscal Q4, which signals that the company’s “fundamentals are strong,” according to Meeks.
PLTR shares are still overvalued
While Meeks gave credit to Palantir where due on “Street Signs Asia”, he agreed that PLTR shares are, nonetheless, “egregiously overvalued” at current levels.
Plus, Alex Karp – chief executive of the artificial intelligence company unloaded PLTR worth millions of dollars last month, which suggests “even he agrees that the stock is expensive,” Meeks added.
Note that Palantir stock does not currently pay a dividend either to appear any more attractive to investors despite overvaluation.
However, Wall Street analysts don’t particularly agree with Meeks’ view on PLTR shares, given that the mean target on them currently sits at about $94, which indicates a potential upside of close to 20% from current levels.
Is it worth investing in Palantir stock?
Palantir’s stock has been slipping in recent weeks even though its AIPCon event earlier this month announced a number of new customers, including notable ones like Delta Air Lines and Walgreens.
At its annual conference, the company also highlighted how its AI solutions are helping drive innovation in American manufacturing.
PLTR has also teamed up with San Jose headquartered air mobility company Archer Aviation on next-gen aviation.
At the time, its CEO Alex Karp told investors:
By integrating Palantir’s advanced AI capabilities with Archer’s innovative approach to aircraft manufacturing and operations, we’re setting the stage for a transformative leap in efficiency, safety, and sustainability.
Still, analysts at Goldman Sachs recently reiterated their $80 price target on Palantir stock, citing valuation risks, particularly in the wake of a possible recession ahead.
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