Palantir Technologies (PLTR) has been remarkably volatile in recent months, and that’s set to continue this week with PLTR stock eyeing a 6.91% pop at the opening bell this Monday morning. The company is in focus on news that NATO will deploy Palantir’s artificial intelligence (AI)-powered Maven Smart System (MSS) into NATO’s Allied Command Operations, demonstrating their growing influence in the defense sector.
“Innovation is core to our Warfighting ability,” said General Markus Laubenthal, who serves as Chief of Staff at Supreme Headquarters Allied Powers Europe (SHAPE). “Maven Smart System NATO enables the Alliance to leverage complex data, accelerate decision-making, and by doing so, adds a true operational value.”
How is Palantir Performing?
Palantir, a specialist in AI-powered intelligence software, has delivered impressive financial performance metrics - including 36% year-over-year revenue growth and free cash flow margins reaching 40% of sales. CEO Alex Karp’s company generated $1.14 billion in free cash flow on revenue of $2.86 billion in 2024, while expanding its customer base by 43% in Q4, led by strong adoption of its Artificial Intelligence Platform (AIP).
Despite these positive developments, the stock has experienced considerable volatility, closing Friday’s session at $88.55 after retreating 25% from its all-time high of $125.41. Valuation concerns persist as the stock trades at 54.8 times forward sales and 158 times forward adjusted earnings, metrics that appear stretched even for a high-growth AI company.
The NATO contract, however, represents a significant validation of Palantir's technological capabilities, with the MSS NATO system expected to be operational within 30 days, enhancing intelligence fusion and battlespace awareness through AI applications. The swift six-month procurement process for the NATO system demonstrates strong institutional confidence in Palantir's abilities and suggests potential for similar rapid implementations in the future.
Is PLTR Stock a Buy?
While PLTR maintains strong fundamentals and continues to expand its government and commercial partnerships, most analysts believe the stock would still need to decline substantially to reach valuation multiples more in line with comparable software companies.
On average, the 20 analysts in coverage rate PLTR stock a “Hold,” with the mean price target of $84.53 indicating expected downside of 4.5% from last week’s closing price.
This article was generated with the support of AI and reviewed by an editor. On the date of publication, the editor did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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