Baird Initiates Coverage on Palantir Technologies

Investing.com — Baird has initiated coverage on Palantir Technologies Inc (NASDAQ: PLTR) with a "neutral" rating. This decision comes due to the company's strong position in artificial intelligence applications, despite its more than 300% gain year-to-date.

>The analyst noted, "We are positive on the company's position, but are wary of chasing given strong YTD performance and valuation."

Palantir’s artificial intelligence platform, launched in 2023, has significantly boosted adoption among commercial enterprises and U.S. government agencies. The platform enables organizations to leverage generative AI to enhance operations, leading to substantial customer growth in the U.S. commercial sector.

Baird acknowledged Palantir's success in deploying generative AI into production, deeming it a critical area for future value creation. The brokerage noted Palantir’s strong operating momentum and continuous contract wins, highlighting the potential for further market penetration.

Risks:
– High valuation premium
– Concentrated revenue base (top three customers account for 18% of 2023 revenue)
– Founder voting control potentially exceeding 49.9%
– Possible shifts in government contracts under a new administration

Despite these risks, Baird pointed out Palantir’s experienced management team, stating, "Senior management has a deep passion for improving the competitive edge for western institutions."

As of Thursday, Palantir shares increased by 2% to $74 during trading.