Selloffs in the market these days almost always bring back the debate about market valuations and the strength of the economy. When the selloff happens in tech stocks, the “AI Bubble” debate is added to the mix. This is what happened last week when stocks like Palantir (PLTR), Tesla (TSLA), and Nvidia (NVDA) went down and spooked the market. Analysts from Wedbush came to the rescue of the dwindling investor sentiment with a positive and upbeat note on the potential of tech stocks going forward.
Dan Ives, managing director at Wedbush Securities, has called it a buying opportunity and believes the ongoing fears in the market only add to some near-term concerns and do not influence the long-term AI potential.
Analysts have pointed out that the hyperscalers continue to invest in AI infrastructure, and no slowdown is expected on that front, at least in 2026. As the technology advances, its applications in different fields will continue to generate growth. The AI arms race is going strong, and investors could be in for a great ride this week, especially with Nvidia earnings coming up on Nov. 19.
About Palantir Stock
Palantir is a software company that works closely with businesses, governments, and intelligence agencies to help identify real-world threats and respond to them. It does so through its Gotham and Foundry platforms while also using AI to enhance its offerings. It is headquartered in Denver, Colorado.
The company’s stock has been range-bound since August, but its one-year gains stand at a healthy 164%, making it a top performer just like last year. It is also up nearly 1000% in the last five years.
Palantir's stock valuation will always be a hotly debated topic. The company is in a league of its own and continues to post record-breaking growth numbers. It trades at a forward P/E of 300x with a consensus earnings growth rate averaging just under 40% over the next three years.
The firm’s “Ontology” (the layer that Palantir builds on top of an organization's existing data) is unique and offers such a strong moat that the company can walk into any industry and change the way people work. The traditional valuation metrics, therefore, do not do justice to how the company should be valued.
Palantir Beats Earnings Estimates
Palantir reported its Q3 earnings on Nov. 3 and not only topped consensus estimates but also gave strong guidance. It reported an EPS of $0.21 vs. expectations of $0.17 on a revenue of $1.18 billion vs. the expected $1.09 billion. The company’s government sales grew 52% YoY, but the commercial segment’s 121% growth was the standout, especially considering how Palantir was often criticized for a lack of commercial sales.
PLTR raised its annual sales expectations to $4.4 billion compared to Wall Street expectations of $4.17 billion. The free cash flow is expected to be around $2 billion. Dan Ives raised the question about the effectiveness of boot camps, which the company organizes to introduce its technology to different companies. Management replied that it closed deals worth $1.3 billion in total contract value, up 6x from the same period last year. What is more positive is that companies are now approaching Palantir for deployment across their whole business rather than in individual parts of their operations. This is encouraging and only goes to show how effective Palantir has been in using ontology to improve organizations’ workflows.
What Are Analysts Saying About PLTR Stock?
Owing to its high valuation, there aren’t many analysts on Wall Street willing to assign a “Strong Buy” rating. Of the 21 analysts that cover the stock, 14 have a “Hold” rating, while four continue to rate the stock a “Strong Buy.” This hasn’t changed over the last four months.
The mean target price of $192.67 offers 11% upside from the current price, while the highest target price of $255 could net investors a 46% gain.
On the date of publication, Jabran Kundi 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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