Palantir Technologies: Risks and Expectations

Palantir Technologies (NASDAQ:PLTR) is receiving cautious approaches from analysts despite strong quarterly results. Almas Almaganbetov, an analyst at Freedom Capital Markets, raised the price target from $170 to $125 while maintaining a 'Sell' rating for the stock. The analyst noted that the stock is positioned at a perfect price.

According to third-quarter results, Palantir generated $1.18 billion in revenue, with an adjusted operating margin of 51%. U.S. commercial revenues increased by 121% year-over-year, and record orders were received for the AIP platform.

However, after the report, PLTR shares lost about 7% of their value and have decreased their gains after a 127% rally year-to-date. Almaganbetov pointed out that growth could slow down after next year, as factors such as the normalization of U.S. commercial momentum, tightening defense and government budgets, and rising costs for hiring in artificial intelligence capabilities could play a role.

The analyst highlighted that the current evaluation leaves little room for disappointment and that downward risks could arise if there is a slowdown in growth rates. This situation emphasizes the tension between rapid artificial intelligence adoption and overly high expectations, potentially prompting investors to reassess their exposure to enterprise AI and defense-focused software.