On Monday, Palantir Technologies made the announcement that they had increased their annual revenue target due to seeing a possibility of profiting from AI. On Tuesday, CNBC's "Street Signs Asia" included a comment from Dan Ives suggesting they were the ideal AI business for generating both government and enterprise income. Nevertheless, when Rishi Jaluria of RBC Capital Markets spoke to CNBC, he stated that Palantir "is not truly a generative AI company."
On Monday, Palantir Technologies raised its annual revenue target, taking advantage of the opportunity to capitalize on AI. CEO Alex Karp stated that rather than creating tools for tasks like writing computer-generated poetry, the aim is now to make money from this technology. For this, Palantir has developed its artificial intelligence platform (AIP), which allows businesses, defense and military organizations to use AI-driven models for decision-making.
Wedbush Securities'Dan Ives is optimistic of Palantir's AI prospects, pointing out it is one of the few names which has the potential to monetize on both the government and enterprise level. Ives also mentioned the recently awarded five-year contract worth up to $463 million from the U.S. Special Operations Command as a key inflection point quarter for the company.
Wedbush said that the company is in talks with over 300 entities to deploy their AIP, as they seek an efficient and secure way to take advantage of the latest LLMs on internal systems and private data. They maintained their outperform rating and $25 price target, which indicates an increase of 39% from the $17.99 closing price on Monday. RBC Capital Markets' managing director, Rishi Jaluria, held an opposing opinion and gave the company an underperform rating, along with a $5 price estimate, signifying a 72% drop from the Monday closing. Jaluria expressed on CNBC's "Squawk Box Asia" that Palantir is not a genuine generative AI company, and based from his discussions with industry viewers and Palantir workers, there is nothing truly distinguishing about it when it comes to generative AI.
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Jaluria remarked that Palantir was sticking to the same services and technology they have been selling, which undoubtedly holds value. But they are not appearing to be making strides in becoming a leader in generative AI, even though they are doing much to appear that way to potential investors and leaders. He further noted the danger of what he called a 'self-fulfilling prophecy risk', explaining that Palantir's efforts to market AI to CIOs and CEOs could lead to new customers, pilots, and business that have yet to be reflected in any numbers. Because of this, Jaluria warned that it could create a dangerous short in the near term.
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