Alex Karp, the CEO of Palantir Technologies Inc., delivered a speech at the 2023 CERAWeek by S&P Global conference in Houston, Texas, US on March 7, 2023.
Aaron M. Sprecher | Bloomberg | Getty Images
Palantir Technologies has revised its annual revenue target as it seeks to commercialize AI, but not all analysts are convinced.
CEO Alex Karp stated Palantir’s goal is to generate profits from AI, rather than solely producing computer-generated poetry tools. Some companies have imposed restrictions on the use of similar tools, such as OpenAI’s ChatGPT.
“We will find ways to monetize it,” said Karp, referring to Palantir’s artificial intelligence platform, known as AIP. According to the company’s website, AIP enables businesses, defense, and military organizations to leverage large language models and AI to support decision-making.
Dan Ives, a managing director at Wedbush Securities, is optimistic about Palantir’s AI aspirations. The firm described AIP as “a star is born” in a recent announcement.
“In our opinion, Palantir is the top AI player, not only in the government sector but also in the enterprise sector,” commented Ives on CNBC’s “Street Signs Asia.” Palantir recently secured a five-year contract with a value of up to $463 million from the U.S. Special Operations Command.
“We believe that this quarter marks a turning point, and Palantir will remain one of the leading AI companies in the coming years,” added Ives.
According to Wedbush, Palantir is currently engaging with over 300 enterprises to deploy AIP, with the objective of providing an efficient and secure solution for utilizing the latest language models internally and on proprietary data.
“Due to its impressive performance and the ongoing AI arms race, we believe Palantir sets the gold standard in AI,” stated Wedbush, reiterating its outperform rating and $25 price target, which represents a potential 39% upside from Monday’s closing stock price of $17.99.
Rishi Jaluria, a managing director at RBC Capital Markets, holds a contrary view, arguing that Palantir is “significantly undervalued.” The firm has assigned an underperform rating and a $5 price target, indicating a potential downside of approximately 72% compared to Palantir’s Monday closing price.
“Based on our discussions with industry experts and Palantir employees, it seems that Palantir’s generative AI capabilities are not truly differentiated,” Jaluria stated during an appearance on CNBC’s “Squawk Box Asia.”
“It appears that Palantir is essentially offering the same services and technology they have been selling before, which does hold value. However, they are not truly leading in generative AI innovation, despite their attempts to position themselves as such in front of investors, CIOs, and CEOs,” Jaluria added.
Jaluria also highlighted the risk of a “self-fulfilling prophecy” in which Palantir’s repeated claims of offering AI can attract new customers and business opportunities, even if the actual numbers don’t reflect it. This presents a potential short-term danger for investors.
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