$PLTR & Its Path To ProfitabilityWith the rapid rise of AI technology, Palantir Technologies Inc. (NYSE: PLTR) is emerging as one of the best AI stocks to invest in thanks to its software platforms. After sharing impressive Q4 results, PLTR stock has been climbing investors’ watchlists as the company posted its first profitable quarter. Given that the company’s platforms could witness strong demand due to their impressive results in the Ukraine war, the PLTR stock forecast appears to be brighter than ever.
PLTR Fundamentals
After posting its first profitable quarter since its inception, PLTR has been climbing investors’ watchlists – with the stock climbing by as much as 35%. Although the company promised to reach profitability in 2025, PLTR reaching this significant milestone this early could be a bullish indication of the PLTR stock forecast. With this in mind, PLTR was able to become profitable despite the several challenges that faced the tech industry due to the current macro environment. As a result of this major achievement, many investors are increasingly bullish that PLTR could achieve its projections of posting a profit for 2023.
With this in mind, PLTR could achieve these projections thanks to the growing interest in AI technology. On that note, more and more organizations across several sectors and industries are embracing AI technology. Based on this, PLTR has been witnessing stronger demand for its products over the past months. Although AI adoption is more widespread in military applications in the meantime, civilian adoption of AI technology is expected to continue growing – outpacing military adoption. For this reason, many investors are increasingly bullish on the long-term PLTR stock forecast.
Meanwhile, PLTR’s AI capabilities are proving their worth on the frontlines in Ukraine where the company’s software platforms are used by the Ukrainian Armed Forces in a range of tasks including targeting. With the war becoming more active again, PLTR could receive additional interest from global governments as they see the company’s technology in a real setting. In that case, PLTR could be poised to secure deals with more governments looking to get access to its technology. In light of this, the PLTR stock forecast could be brighter than ever in 2023.
In addition to its AI capabilities, PLTR also offers impressive software platforms that help organizations integrate their data, decisions, and operations. Through these platforms, PLTR has created one of the best user experiences for working with data – empowering people to ask and answer complex questions without mastering a querying language, statistical modeling, or the command line. In that way, many organizations use PLTR’s platforms to help them do their most important work. Considering the several benefits of the company’s platforms, the PLTR stock forecast could be bullish as the stock could be one of the best AI stocks to invest in this year.
As a testament to its impressive products, the Defense Information Systems Agency granted PLTR’s federal cloud service offering a DOD Impact Level 6 Provision Authorization. This is DISA’s highest level of certification allowing PLTR to join Microsoft and Amazon web services as the only cloud providers with IL6 status. While this designation could help PLTR secure additional government contracts, it could also help the company grow its commercial customers as these customers would guarantee the processing and analysis of their data in a secure manner. In that way, more customers could find PLTR’s offerings appealing thanks to their unique features. As a result, PLTR could be one of the artificial intelligence stocks to watch closely this year.
On that note, PLTR witnessed impressive customer growth in 2022 as its customers increased 79% YOY to 143. At the same time, PLTR converted 13 pilot contracts in Q4 – the most it converted in a quarter since its inception. Despite this, PLTR provides its products to only 15% of the top 1000 companies in the US – which leaves a major room for growth for PLTR. Considering the potential demand for the company’s products, PLTR could be one of the best AI stocks to hold this year.
Another major catalyst to watch is PLTR potentially being bought out. In its latest earnings call the company’s CEO – Alex Karp – hinted at the possibility of a buyout saying “I think there’s going to be a lot of interest in us in buying our software and potentially in buying us”. Considering the company’s impressive software platforms, a potential buyout could be extremely profitable for PLTR’s shareholders. While such a buyout remains just speculation, it is worth watching as the stock could soar on news of a buyout.
Although PLTR appears to be on the right track to profitability a major risk facing its shareholders is the potential dilution related to its share-based compensation. Since becoming a public company, PLTR has been paying its management and executives in shares – leading to its bloated share structure. However, PLTR is working to reduce this risk as the company has consistently reduced its share-based compensation throughout the past years.
PLTR Financials
Looking into PLTR’s 2022 earnings, the company grew its assets to $3.4 billion compared to $3.2 billion in 2021. The company also increased its cash balance from $2.2 billion to $2.5 billion. At the same time, PLTR reduced its liabilities from $956.4 million to $818.8 million and has no long-term debt. In light of this, PLTR appears to be in a strong financial position as its cash balance far exceeds its total liabilities.
In terms of revenues, PLTR realized $1.9 billion – a significant increase from $1.5 billion in 2021. Meanwhile, operating costs slightly increased from $1.61 billion to $1.65 billion. In this way, PLTR’s net loss declined from $488.4 million to $361 million for 2022. Despite this loss, the PLTR stock forecast appears to be bullish as the company reported a net profit of $33.4 million in Q4 2022. With the company expecting profitability in 2023, PLTR could be one of the artificial intelligence stocks to hold onto this year.
Technical Analysis
PLTR stock price is currently at $9.71 and the stock shows supports near 8.66, 7.45, and 6.68. Meanwhile, PLTR shows resistances near 10.35 and 11.81. After posting its first profitable quarter, PLTR soared by as much as 35% given the scale of this milestone. With the company projecting a profitable year in 2023, PLTR could be one to hold this year as it could further appreciate in value.
After failing to break through its resistance, PLTR has been dropping and could continue to fall over the coming week near its support. With this in mind, the $8.66 support appears to be a strong support level as it is near the 50 MA support. In case PLTR successfully retests this support, it could be a good entry point for investors bullish on PLTR’s future prospects. However, investors should note that PLTR has a gap near $7.6 that has to fill which the stock could drop to fill if it breaks through its 50 MA support. Based on this, the 50 MA support is a critical level to watch before making a decision regarding PLTR.
In light of PLTR’s impressive news, accumulation spiked but is witnessing a slight downtick which could be attributed to investors taking profits. Similarly, the MACD recently turned bearish which could indicate a reversal in PLTR’s price movement. Meanwhile, the RSI cooled off significantly from 86 to 62 indicating that the RSI could further drop to regulate. Based on these indicators, bullish investors could wait for the stock to consolidate first before entering their positions. PLTR has an OS of 2 billion and a float of 1.7 billion.
PLTR Forecast
After posting its first-ever profitable quarter, PLTR is gaining investors’ attention thanks to its guidance of a profitable 2023. Since the company’s products are witnessing a strong demand due to the increasing adoption of AI technology, PLTR appears to be on the right track to achieve its guidance. With this in mind, PLTR has substantial potential to further grow its customers as its products are showing impressive results in the Ukraine war. In this way, PLTR could expect a surge in government deals as more governments look to adopt AI technology.
Meanwhile, PLTR’s commercial customers could be on track to further grow thanks to the company’s IL6 designation from the DISA. Since this designation is a testament to the company’s extremely secure products, the PLTR stock forecast could be bullish in 2023. While dilution remains a substantial risk, PLTR’s management of its share-based compensation could make it one of the best AI stocks to invest in.
