Palantir Stock Can Take Off Because ‘Data Is a Strategic Asset’

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Palantir Technologies

shares got a boost as BofA Global Research analyst Mariana Perez Mora began coverage of the analytics software company with a price target that is more than 50% above the level before her call.

Mora rates the shares at Buy, with a target of $13, while the stock closed Friday at $8.24. Tuesday afternoon, the stock was up 7.5% at $8.86.

Palantir (ticker: PLTR) stands to benefit from the growing demand for AI-based software from commercial and government clients, the analyst wrote in a research note. The company’s strong market position and differentiated software should support annual growth north of 30% a year, with improving profits over time, she said.

And increased urgency regarding modernizing the U.S.’s military and intelligence capabilities “should provide significant opportunities,” she said.

Palantir shares have fallen about 50% so far this year as investors have fled highly valued software stocks. Disappointing results and financial guidance have hurt the stock, and according to Mora, the shares have seen no benefit so far in 2022 from the company’s significant exposure to the U.S. government’s security and defense operations. 

“While geopolitical tensions pose a risk to worldwide software penetration, they are an opportunity for Palantir’s national security solutions in the U.S. and allied countries, as militaries and intel services will need enhanced data and logistics capabilities as soon as possible,” she wrote. 

“We expect U.S. and allies defense budgets to grow with increased focus on modernization and implementation of new technologies,” Mora added. “Data is a strategic asset and national security agencies have to make sure they operationalize it securely to better defend from near peer threats like Russia or China. The recent Russo-Ukraine conflict made clear that time is of the essence and new technologies have to be incorporated as soon as possible.”

Write to Eric J. Savitz at [email protected]