Analyst recommends buying Palantir stock on dips as it 'fuels great enterprise AI'

Palantir Technologies Inc. (NYSE: PLTR) has already seen its stock more than double in value in 2024, but according to Northland Capital Markets analyst Michael Latimore, the data analytics firm still has room to grow. 

Latimore recently issued a bullish $35 price target for Palantir, suggesting a potential 10% upside from its current levels. 

He believes that Palantir is well-positioned to benefit from the ongoing expansion of artificial intelligence (AI) use cases, making it a compelling buy on any dips.

'Palantir makes every company’s data great'

Latimore's optimism is rooted in Palantir's strategic focus on enterprise AI, which he views as the next major wave in technology.

He noted that Palantir's offerings go beyond simply automating data insights—they also automate decision-making processes, making the company's technology invaluable for businesses looking to leverage AI for enhanced efficiency and productivity.

Currently, Palantir generates about half of its revenue from government contracts, but its enterprise business is gaining significant traction this year.

Latimore emphasized that "Palantir makes every company’s data great, and thus, fuels great enterprise AI."

This unique value proposition positions Palantir as a key player in the rapidly expanding enterprise AI market, which is expected to grow substantially over the next decade.

Despite its strong growth potential, Palantir has yet to attract income-focused investors, as the company does not currently pay a dividend.

However, for those interested in the long-term potential of AI, Palantir represents a compelling investment opportunity.

How good is Palantir's financial performance?

Palantir's recent financial performance further supports Latimore's bullish outlook.

In early August, the company reported solid results for its fiscal second quarter and subsequently raised its full-year revenue guidance for 2024.

Palantir now expects its revenue to range between $2.74 billion and $2.75 billion, up from its previous guidance of up to $2.69 billion.

Analysts had forecasted revenue of $2.70 billion, highlighting Palantir's ability to outperform expectations.

This improved outlook is driven by the company's continued success in leveraging AI tailwinds.

Statista forecasts that the global AI market will reach $1 trillion over the next ten years, and Palantir is well-positioned to capitalize on this growth.

Latimore is confident that Palantir can trade at 22 times its revenue, which would see the stock reach his $35 price target within the next twelve months.

Should you buy Palantir?

Latimore's recommendation to buy Palantir on dips is based on the company's ability to deliver automated insights and decisions, which are increasingly critical in the evolving AI landscape.

As AI use cases continue to expand, Palantir's technology will become even more integral to businesses across various industries.

For investors looking to gain exposure to the burgeoning enterprise AI market, Palantir offers a strategic opportunity.

While the stock's current price reflects significant gains, its potential for future growth—driven by both its government and enterprise segments—makes it a stock worth considering on any price pullbacks.