Palantir’s A.I. ambitions divide analysts. A bull and bear make their cases

Palantir Technologies raised its annual income goal on Monday because it sees a possibility to commercialize AI, however not all analysts are satisfied.

On Monday, CEO Alex Karp mentioned Palantir’s intention is to earn cash from AI, as an alternative of merely producing instruments that write computer-generated poetry. Some firms have restricted their staff from utilizing such instruments like OpenAI’s ChatGPT.

“We will figure out how to monetize it,” Karp mentioned, referring to Palantir’s synthetic intelligence platform, or AIP. According to the corporate’s web site, AIP will enable companies in addition to protection and navy organizations to faucet giant language fashions and AI to assist in decision-making.

Dan Ives, managing director at Wedbush Securities, is bullish on Palantir’s AI ambitions. On Monday, the agency mentioned “a star is born,” referring to AIP.

“That’s probably the best pure play AI name, in terms of them monetizing not just on the government side, but on the enterprise side when it comes to AI,” mentioned Ives on CNBC’s “Street Signs Asia” on Tuesday. Palantir not too long ago introduced it was awarded a five-year contract price as much as $463 million from the U.S. Special Operations Command.

“And I think we saw this as an inflection point quarter, where this remains, in our opinion, one of the core AI names over the coming years,” mentioned Ives.

In the be aware, Wedbush mentioned “the company is engaging with 300+ enterprises to deploy AIP, all searching for an efficient and secure solution to adapt the latest LLMs for use on internal systems and proprietary data.”

“Based on the strong performance and the AI arms race well underway, we continue to believe Palantir is the gold standard in AI,” Wedbush mentioned. The agency maintained their outperform ranking and $25 value goal, representing roughly 39% upside from the inventory’s Monday shut of $17.99.

Rishi Jaluria, managing director at RBC Capital Markets, disagreed and mentioned Palantir is “worth substantially lower.” The agency has an underperform ranking on the inventory in addition to a $5 value goal, which means draw back of about 72% from Palantir’s Monday shut.

“This is not truly a generative AI company. When we look at Palantir and based on our conversations with [industry observers and Palantir’s employees], this does not appear to be anything truly differentiated when it comes to generative AI,” Jaluria mentioned on CNBC’s “Squawk Box Asia” on Tuesday.

“This really feels like the same Palantir services and technology that they’ve been selling, which has its value. They’re not actually adding a tremendous amount of value to be a leader in generative AI, even though they are positioning themselves as such in front of the investment community and even in front of CIOs and CEOs,” mentioned Jaluria.

But there’s nonetheless a “self-fulfilling prophecy risk” that Palantir can exit and discuss to CEOs and CIOs and say they’re doing AI over and over, mentioned Jaluria.

“And that can convince the startup of new customers, new pilots, new business that actually hasn’t shown up in numbers yet. And that’s why we think it could be a dangerous short in the near term.”