Why Palantir Stock Popped Today
Key Points
Rosenblatt reiterated its buy rating and $225 price target on Palantir stock this morning.
Rosenblatt cited a new FAA SMART contract as its basis for optimism -- but Palantir lost that contract.
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Government IT contracting stock and artificial intelligence company Palantir Technologies (NASDAQ: PLTR) gained 2.8% through 10:45 a.m. ET Wednesday.
You can thank Rosenblatt Securities for that.
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Image source: Palantir.
Rosenblatt loves Palantir stock
Rosenblatt reiterated its buy rating and $225 price target on Palantir stock this morning, citing the Federal Aviation Administration's launch of an artificial intelligence-powered flight management system called Strategic Management of Airspace, Routes and Trajectories, or "SMART," at three major Washington-area airports.
Palantir didn't win the contract for SMART, but the FAA did give it a sole-source contract for "FAALC Data Modernization and AI Integration" at airports based on the company's Foundry software. For Rosenblatt, it seems good enough just that the SMART system is rolling out to convince the analyst that Palantir's central position in AI data management is secure.
A note on StreetInsider.com also says investor enthusiasm is growing around a Chipotle Mexican Grill (NYSE: CMG) pilot "Food Safety Risk Management Platform" project built on Palantir's same Foundry software.
What's next for Palantir stock
Is the enthusiasm over the couple-few contracts justified, though? On the one hand, I've been singing Palantir's praises a lot lately. On the other hand, though... people have been listening, and Palantir stock is now up a massive 76% over the past three months!
At today's price, the stock trades for roughly 130 times free cash flow and nearly 160 times earnings -- heady valuations even for a stock expected to grow earnings 57% annually over the next five years. From where I sit, it looks like most of the easy money has been made in Palantir stock.
Further gains will be much harder to come by.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chipotle Mexican Grill and Palantir Technologies. The Motley Fool recommends the following options: short September 2026 $35 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.
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