Palantir Technologies, a data-mining software company, has garnered significant attention from retail investors. However, Bank of America has highlighted the misconceptions that still exist about the company on Wall Street.
In a recent note, analysts emphasized the tendency for early estimates to underestimate the growth and potential of emerging technologies. This was exemplified by a 1980 estimate of cell phone users by 2000, which fell drastically short of the actual number. The analysts drew a parallel between this misunderstanding and how Palantir’s capabilities and technology are perceived by institutional investors.
The upcoming inclusion of Palantir in the S&P 500 is seen as a pivotal moment for reevaluating perceptions about the company. BofA reiterated its buy rating on Palantir stock and raised its price target to $50, emphasizing that institutional investors should reconsider what they “know” about PLTR.
The key misunderstanding on Wall Street revolves around Palantir’s unconventional sales strategy that involves engineers playing an essential role. While some have expressed concerns about limitations in scalability and profitability, BofA believes this approach makes PLTR solutions more relevant to users and gives them stronger pricing power.
As Palantir continues to attract customers in both public and private sectors, BofA sees significant potential for it to become the common data operational system for large U.S. businesses and government entities.
Despite being known for its work in defense and intelligence sectors, Palantir has been expanding into commercial spaces as well.
CEO Alex Karp celebrated Palantir’s inclusion in the S&P 500 in a video where he acknowledged Wall Street’s misconceptions about the company while highlighting its innovative products that are ahead of their time.
Karp also recognized retail investors who have maintained faith in the company amid these misconceptions, emphasizing that “the rebels won.”
