Palantir (NYSE:PLTR) stock continues to capture the attention of retail investors looking for the next big AI play. The company’s software is designed to work with and transform massive data sets into actionable insights.
However, this software was mainly targeting government agencies and their AIP platform is available to a variety of different businesses. Now with Palantir being GAAP profitable, they’re eligible to join the S&P 500. This will be the next major catalyst and they might even have something extra up their sleeves in 2024.
Commercial Revenue Growth
Since the company’s IPO back in September of 2020, it has been a huge rollercoaster ride for shareholders. The company has faced its fair share of criticism as they have been extremely reliant on government contracts.
They have built strong relationships with government agencies and defense contractors, but are steadily expanding their commercial presence. Palantir’s commercial clients already include companies in healthcare, manufacturing, and finance. They aim to accelerate drug discovery in the pharmaceutical industry, as well as improve supply chain and operational efficiency in manufacturing.
The growth of their commercial business is exciting for investors, and can have a positive impact on the company’s top and bottom line in FY24. Furthermore, this excitement is not just hearsay as commercial revenue grew 70% YOY in Q4 2023. PLTR stock is expanding its global footing and their AIP is well positioned for strong double digit growth over the next few years.
Palantir’s Competitive Advantage
Artificial intelligence is moving at a fast pace, making it extremely difficult for businesses to keep up. Palantir is currently at the forefront of this AI gold rush, with its robust product suite to meet the growing demands of the marketplace.
Their Foundry platform distinguishes itself from its competitors through its ability to handle vast amounts of heterogeneous data. Data comes in all shapes and sizes, and depending on the business the complexity can be even more diverse. Foundry has a unique ability to discern this data at a high rate of success.
Furthermore, Palantir’s focus on data security has been integral since the company’s founding. The platform was developed specifically to address the needs of government intelligence agencies. This approach will be integral for their other platforms including Gotham, Apollo and AIP. As AI adoption continues to accelerate, PLTR stock is well positioned to be one of the leading data analytics and AI stocks on the market.
PLTR Stock Is Still a Buy
Palantir presents a compelling investment opportunity in 2024. The company is a leader in the booming AI market, with a powerful platform capable of unlocking valuable insights from large and complex data sets.
Moreover, Palantir’s expansion in commercial revenues shows only a sliver of their long term potential to drive profitable growth. The possibility of an S&P 500 inclusion could be the major catalyst to drive the stock price even higher in 2024. Although the valuation is still rich, Palantir appears to be in a hyper growth phase that AI stock investors simply cannot ignore.
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
