Analyst Says Palantir Stands Apart From 'ChatGPT Wrapper' AI Companies, Ups Price Target: Retail's Divided

BofA said the speed and scale at which the company can deploy products and convert customers are accelerating.

High-flying stock Palantir Technologies, Inc. (PLTR) saw muted gains on Monday, underperforming the broader market, which went berserk following the China trade deal.

Palantir stock ended Monday's session up 0.99% at $118.46 versus the 3.26% gain for the S&P 500 Index.

The muted performance came despite BofA upping its price target for the Palantir stock to $150 from $125 on Monday, while maintaining a 'Buy' rating.

BofA analysts suggested that Palantir has differentiated itself from companies that continue to announce artificial intelligence (AI) initiatives, product developments and integrations while underneath their tools are often "ChatGPT wrappers."

The analysts said the Alex Karp-led company is creating "outcome-focused bespoke AI-enabled products, at scale." They also said that the speed and scale at which the company can deploy products and convert customers are accelerating. 

BofA sees defense and commercial markets — Palantir's key end markets — being in the "infancy of unlocking real-value via AI."

On Stocktwits, retail sentiment toward Palantir stock was 'neutral' (45/100) by early Tuesday, and the message volume stayed 'normal.'

A bearish watcher noted that Palantir stock failed to break to new highs even after a few attempts. They also fretted over the unattractive valuation (forward price-earnings multiple of 192.2 times, according to Koyfin).

Another user professed bullishness on the stock, citing insider buying. Palantir disclosed in a filing with the SEC late Monday that former Chief Administrative Officer Heather Planishek bought 10,000 shares.

Notwithstanding Monday's lackluster showing, the AI-powered data analytics company's stock is up about 57% this year, making it the second best-performer among the S&P 500 companies.

The Koyfin-compiled average analysts' price target for the stock is $94.70, suggesting roughly 20% downside from Monday's close.

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