Is Palantir Technologies Stock a Buy Now?

Let's see why that has been the case, and check if buying this AI stock after such remarkable gains would be the right thing to do

Image source: Getty Images

Palantir's growth trajectory is imving Palantir's stunning rally can be credited to an imvement in its growth file in the past year as the demand for its AI software platform is bringing more into the company's fold

This is evident from the ing chart, which shows an upward swing in Palantir's top-line growth in the past couple of years

PLTR Revenue (Quarterly) data by YCharts

Looking ahead, Palantir is quite capable of sustaining this upward growth trajectory considering the pace at which it is winning new and expanding its customer base thanks to AI

Apart from this healthy increase in the customer count, Palantir benefited from the size of the deals that it landed

It won't be surprising to see Palantir's healthy deal momentum continue on account of the ductivity gains that its Artificial Intelligence Platform (AIP) is dering to customers

Palantir's AIP enables customers to integrate generative AI tools into their operations, powered by real-time data to imve decision-making

Palantir management has pointed out several instances where AIP has led to a sharp imvement in ductivity for its customers, and that has led to an expansion in the adoption of this platform

Not surprisingly, Palantir is looking to push the envelope further on the duct development front

Management pointed out on the May earnings conference call that AIP has "entered the next phase of duct development and adoption focused on enterprise autonomy. " The company claims that it is now working on deploying AI agents that could increase ductivity by a whopping 50 times

This fast-growing opportunity, along with Palantir's solid unit economics that are being driven by the expanded use of its AIP by existing customers, should set the company up for impressive bottom-line growth in the long run

As such, it is easy to see why Palantir's bottom-line growth is expected to accelerate

PLTR EPS Estimates for Current Fiscal Year data by YCharts

Analysts, however, are expecting this AI stock to pull back Only a fourth of the 28 analysts covering Palantir recommend buying the stock right now

It is easy to see why analysts aren't expecting upside from Palantir despite its impressive growth and sunny spects -- the stock's valuation has reached astronomical levels

So, anyone looking to buy Palantir stock right now needs to be prepared for a lot of volatility since it will have to continue outperforming expectations handsomely to justify its valuation

Any signs of weakness could send the stock packing

However, if there's indeed a pullback in Palantir stock, savvy investors should consider accumulating it as the long-term growth opportunity is good enough to help it become a winner in the long run

So, even though buying Palantir stock is a risky position right now, the potential long-term reward is the reason why investors should keep an eye on it and buy the dips

Harsh Chauhan has no position in any of the stocks mentioned

The Motley Fool has positions in and recommends Palantir nologies

The Motley Fool has a disclosure policy.