Palantir (PLTR.US) has excellent Q2 results, Wall Street analysts have raised their target prices

The Zhitong Finance App learned that Palantir (PLTR.US)'s stock price rose after announcing second-quarter results and guidelines that exceeded expectations, and Wall Street analysts are also optimistic about the stock.

Morgan Stanley maintained its “hold” rating on Palantir, but raised the target price from $98 to $155.

A team of analysts led by Sanjit Singh said that the second quarter marked the eighth consecutive quarter of accelerated revenue growth and a significant increase in profit margins. This strong performance was driven by a further increase in the US commercial business growth rate from 71% in the first quarter to 93%; and a further increase in the government business growth rate from 45% to 49%.

Analysts added that the revenue guidance for the third quarter was a 50% year-on-year increase, while the 2025 revenue growth guide increased from 36% to 45%, while the operating margin reached 46%, which is at the leading level in the industry, which further proves its position as a clear winner in the field of artificial intelligence.

Singh and his team pointed out that the only shortcoming at the moment is the international commercial business, which declined 3% year over year, compared to a 5% decline in the first quarter.

Piper Sandler gave Palantir an “added weight” rating and raised the target price from $170 to $182.

A team of analysts led by Brent Bracelin said Palantir won a 10-year, $10 billion contract from the US Army, further proving the company's viability to expand the government's business share in the defense market of more than $1 trillion. At the same time, the growth rate of the company's US commercial business increased to 93%, which also highlights the potential for developing AI platforms for large enterprise customers.

Analysts said, “Although Palantir has a high valuation premium and is still in a high-risk investment category, its unique 'growth+profit margin' model places it in a unique position worthy of a premium.”

Cantor reiterated Palantir's “neutral” rating, but raised the target price from $110 to $155.

Analyst Thomas Blakey and his team said that Palantir's management's guidance on the US commercial business indicates that despite maintaining a strong growth trend in the second half of 2024, the business's performance will continue to grow by nearly 90%. Palantir has set new records for total contract value (TCV), reservation value, and remaining transaction value, while the company appears to be focusing on the US region. The Cantor model predicts that by the end of 2026, the US region will account for close to 80% of revenue compared to the previous forecast of 75%.

Analysts said, “Palantir is still leading the way in the long-term growth trend of using artificial intelligence. This trend appears to be driving changes in the entire industry, as well as driving Palantir's own development. Our 'neutral' rating is based on its valuations continuing to reflect this leading position in the industry.”

Before the US stock market on Wednesday, as of press release, Palantir rose 0.52% to $174.17. The stock closed up 7.85% on Tuesday, up 129% during the year.