Is Palantir Stock a Buy After Its Beat-And-Raise Quarter?

(Image credit: Stefan Wermuth/Bloomberg via Getty Images)

Palantir Technologies (PLTR) stock is soaring Tuesday after the data analytics firm beat top- and bottom-line expectations for its second quarter and raised its full-year revenue forecast.

In the three months ended June 30, Palantir's revenue increased 27.2% year-over-year to $678.1 million, driven by 54.6% growth from U.S. commercial customers to $159.2 million and strong growth in its Artificial Intelligence Platform (AIP). Its earnings per share (EPS) improved to 9 cents from 5 cents in the year-ago period, up 80%.

"The growth of our business has been re-accelerating steadily, and we see an unprecedented opportunity ahead to capture and build on that momentum," wrote Palantir CEO Alex Karp in his letter to shareholders. "Our growth across the commercial and government markets has been driven by an unrelenting wave of demand from customers for artificial intelligence systems that go beyond the merely performative and academic."

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The results surpassed analysts" expectations. Wall Street was anticipating revenue of $653 million and earnings of 8 cents per share, according to MarketWatch.

As a result of its strong performance in the first half of 2024, Palantir raised its full-year revenue forecast. The company now anticipates revenue to arrive between $2.742 billion to $2.75 billion, up from its previous forecast of revenue in the range of $2.677 billion to $2.689 billion. The revised outlook includes U.S. commercial revenue growth of at least 47% to over $672 million, up from its prior guidance for growth of at least 45% to over $661 million.

Is Palantir stock a buy, sell or hold?

Although Palantir is up 51% for the year to date, Wall Street is on the sidelines when it comes to the tech stock. According to S&P Global Market Intelligence, the average analyst target price for PLTR stock is $24.56, representing a discount of roughly 7% to current levels. Additionally, the consensus recommendation is Hold.

Still, there are some bulls to be found, including in financial services firm Wedbush, which has with an Outperform rating (equivalent to a Buy). The group also hiked its price target on Palantir after earnings.

"We are raising our price target to $38 from $35 as the AIP story now takes hold for the Palantir story," said Wedbush analyst Daniel Ives in a note. "We maintain our Outperform rating with our bull case $50. This was a game changer quarter for the Palantir story as the AIP monetization piece on U.S. commercial was front and center as a major growth driver."

Wedbush's $38 price target is the highest on Wall Street and sits 44% higher than where Palantir is currently trading.

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.