Citi highlights early AIP monetization as Palantir stock ‘expensive’ By Investing.com

On Thursday, Citi reaffirmed its Neutral rating on Palantir Technologies Inc . (NYSE: NYSE:) stock with a steady price target of $30.00. Following a recent visit to Palantir’s New York City office, discussions with CFO Dave Glazer highlighted a positive outlook on the Artificial Intelligence Program (AIP) momentum, with a stable macro environment commentary.

The conversation also touched upon the Government business sector, particularly in light of a significant Department of Defense (DoD) deal concluded last quarter, which bolstered U.S. Government growth trends for the second half of the year.

The hiring of Mike Gallagher was noted as a beneficial long-term asset. Palantir’s recent addition to the prompted a 15% surge in share value, elevating the company’s valuation to around 25 times next twelve months (NTM) Enterprise Value/Sales (Ev/Sales). This makes Palantir one of the priciest stocks in the software sector.

Despite strong bookings in both commercial and government segments, Citi remains cautious. The firm points out that while AIP monetization is in the early stages, the Government business could experience variability as the election period approaches. This perspective keeps Citi from adopting a more bullish stance on Palantir’s stock at this time.

Palantir’s inclusion in the S&P 500 this week marks a milestone for the company, reflecting its growth and prominence in the market. However, the resultant increase in valuation has contributed to Citi’s decision to maintain a neutral position. The firm’s assessment indicates a watchful approach to the stock, considering the current valuation and potential uncertainties in the Government business sector.

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