Loop Capital Launches Coverage of Palantir at Buy, $141 Price Target

Loop Capital analyst Rob Sanderson initiates coverage on Palantir Technologies Inc.

(NASDAQ: PLTR) with a Buy rating and a price target of $141.

“We are initiating coverage of Palantir Technologies with a Buy rating and $141 price target.

Palantir is leveraged to the AI (and GenAI) themes sweeping through the tech sector, which are enormous market opportunities likely to create several multi-billion dollar revenue companies.

Specifically, the firm provides a modern AI data platform (i.e., analytical tools, data infrastructure software, AI tooling) that helps government agencies and enterprises make data-driven decisions by detecting unusual or previously undetectable patterns in large complex datasets.

Its AI data platform is differentiated by its Ontology, which presents data to users in their own everyday terms and represents decisions in an enterprise, thus becoming a powerful tool for AI-driven decision-making.

On top of this, Palantir deploys an effective and super-efficient go-to-market approach that attracts customers and quickly converts them into paying customers of its complex products.

The major pushback on our bullish view will be valuation. At nearly 44x EV/2027E Revenue, we acknowledge that it’s hard to say that this is the right spot to step up on PLTR.

While we usually don’t recommend paying 44x sales for software companies, we believe Palantir has all the hallmarks (i.e., massive market, category leader, strong execution) of becoming a game-changing software stock along the same lines as Adobe in digital marketing and salesforce.com in cloud.

So if you buy into the big picture as we do — that the AI software opportunity is enormous, just getting started, and PLTR is a leader in this effort — then it’s hard to put a price on the opportunity, so we believe the best strategy is to hold your nose on valuation and just get involved.

For those wanting exposure to this dynamic, we recommend establishing starter positions in PLTR (i.e., not “pushing in all the chips”) and then adding aggressively to positions on pullbacks.

Initiate at Buy.”

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