Palantir Technologies Inc. could boast an advantage over other software players when it comes to artificial intelligence, thanks to its longstanding focus on privacy.
That’s according to BofA Securities analyst Mariana Perez Mora, who boosted her price objective on Palantir’s
stock to $18 from $13 in a Monday note to clients. The stock was up more than 4% in Monday morning action.
“Most of the corporations eager to use generative AI have compliance, regulatory, ethical, legal, privacy rights, data security, and accountability/oversight requirements,” Perez Mora wrote. “From its experience working with the government and highly regulated industries, [Palantir] has already developed and implemented the architectural design that supports generative AI in a compliant and private world.”
Perez Mora cheered the company’s “unique position” in the AI race and added that the company has shown “demonstrated use cases across sectors.”
She highlighted recent commentary from Palantir Chief Executive Alex Karp, who said that inbound interest around the company’s AI solutions has been higher in the last few weeks than it was in all of 2022, driven by the company’s launch of its Artificial Intelligence Platform (AIP).
“We think AIP solutions could help [Palantir] further penetrate within existing customers and open up partnership opportunities to develop easily scalable AI solutions,” Perez Mora wrote, while maintaining a buy rating on the stock.
Palantir shares are up 65% over the past month, thanks in part to enthusiasm around AI, and they’re ahead 144% so far in 2023. But is the stock in a bubble? Perhaps not, BofA analysts suggest.
“The speed and magnitude of the stock appreciation for AI-related companies has started to raise market concerns about a bubble,” and 10-year yields above 4% represent a headwind to AI players and technology companies more broadly, Perez Mora wrote.
However, “[f]rom a growth perspective, the technology is still in the early innings, making it harder to meaningfully disappoint expectations,” she noted.