Palantir Technologies Inc. (NYSE:PLTR) remains a stock to hold for the long term despite recent market volatility, with the potential to reach a $1 trillion valuation, according to Will McGough, Director of Investments at Prime Capital Financial.
What Happened: McGough maintains his buy recommendation on the artificial intelligence software company even after its shares have surged 55% this year, pushing its market cap to $281 billion, now exceeding Salesforce, which generates 10 times more revenue, reported CNBC.
“I think you own for the ride to a trillion-dollar market cap knowing it’s going to be extremely volatile,” McGough said.
The bullish outlook aligns with Wedbush Securities analyst Dan Ives, who recently raised his price target from $120 to $140 while calling Palantir “the Messi of AI” and “a core name in the AI Revolution.” Ives similarly projected a trillion-dollar valuation within three years, citing the company’s success with its AIP product and multi-million dollar deals pipeline.
Why It Matters: Palantir’s lofty valuation metrics remain controversial, trading at 520 times trailing earnings, almost 200 times forward earnings and 90 times revenue. The disparity has created a stark divide between institutional skeptics and retail investors who have driven the stock up over 400% in the past year.
The data analytics firm reported impressive first-quarter results, with revenue beating expectations at $883.86 million, up 39% year-over-year. U.S. commercial revenue specifically surged 71%, while CEO Alex Karp described a “tectonic shift” in software adoption.
Price Action: Palantir closed at $117.30 on Friday, down 1.55% for the day. In after-hours trading, the stock dipped another 0.49% to $116.72. Year to date, Palantir shares have surged 56%.
Palantir Technologies shows strong growth and momentum, but ranks low on valuation metrics, according to Benzinga Stock Edge Rankings. PLTR shares exhibit a positive price trend across both short- and long-term periods. Check the detailed report here.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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