Palantir Leads ‘Fast-Growing, Diverse Enterprise AI Market,’ Analyst Says, But Prefers to Stay Away: Here’s Why – Palantir Technologies (NYSE:PLTR)

Data analysis company Palantir Technologies, Inc. PLTRwhich owns a proprietary artificial intelligence platform, AIP, is a great AI investment, said an analyst at Northland Capital Markets.

Palantir Analyst: Michael Latimore initiated the issuance of Palantir shares with a Market Perform rating and a $35 price target, suggesting an upside of just 8% from current levels.

Palantir’s thesis: Palantir’s AI operating system, powered by Ontology software, overcomes myriad adoption barriers and ignites AI use across the enterprise, Latimore said in the memo. “Palantir is not only automating insight generation, but also decision making—the next wave of AI,” he said.

The analyst said Palantir’s platform produces AI at scale, which leads to the accumulation of value rather than the accumulation of complexity. The company makes it easier to access and use the siloed, disconnected data that enterprises have without “costly processes of deletion and replacement,” adding, “Palantir makes every company’s data great, and in doing so, drives great enterprise AI.”

Tracing the evolution of AI, Latimore noted that the first advance was computers recognizing basic anomalies in data, the next incremental value came from automated insights, and the third step was automated decisions. “Palantir is elevating all three areas of AI for the company and significantly accelerating decision-making,” he said.

See also: Top AI Stocks

The analyst noted that AI is driving material efficiency, new revenue streams and safety, with addressable markets growing at a rate of more than 30%. Use cases are likely to expand across companies over time, he added.

The analyst said Palantir is “a way to invest in the fast-growing, diverse enterprise AI market,” adding that the company’s enterprise segment is accelerating, which is helping to fuel the overall business, which currently relies on 50% of government revenue.

“We estimate Palantir to hit 59 on a 40 basis in FY24 and 57 in FY25. This high suggests PLTR should be able to trade at 22 times full-year revenue, putting the stock at $35,” the analyst said.

The analyst said that during periods of falling stock prices he would look to buy shares of the artificial intelligence leader.

Palantir shares were up 0.21% to $32.61 in pre-market trading, according to Benzinga Pro data.

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