Palantir Technologies Inc. (NYSE:PLTR), whose shares have surged over 376% year-to-date, was better understood by retail investors than institutional ones during its challenging period in 2022, according to Wedbush Securities Managing Director Dan Ives.

What Happened: “Institutional investors were stuck in group-think when it came to Palantir as an investment in 2022. It wasn’t part of the cool kids club,” Ives said in an interview with Palantir investor Amit Kukreja. “People didn’t understand the culture of Palantir. We’re talking about the elite of the elite.”

The data analytics company’s stock performance has made it the S&P 500’s top performer this year, pushing its market capitalization to $176.47 billion. However, this surge has raised valuation concerns among analysts, with the stock trading at 172 times its projected 2025 earnings – nearly triple the industry average of 59.4.

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Why It Matters: Despite the lofty valuation, Ives maintains his bullish stance with a $75 price target, describing Palantir as “the Messi of AI” and predicting significant AI spending growth in 2025. UBS recently set a higher $80 target while maintaining a neutral rating, though expressing concerns about the current valuation at 49 times revenue.

Former Palantir employee Alex Fishman, now with Empros Capital, reinforced the optimistic outlook: “When I look at Palantir, it’s one of the few companies where I can easily envision it becoming 10 or 20 times its current size.”

The broader Wall Street consensus remains cautious, with an average price target of $35.58 based on 20 analyst ratings, suggesting potential downside risk despite the company’s strong momentum in artificial intelligence and data analytics.

Price Action: Palantir stock closed at $79.08 on Friday, down 3.73% for the day, with after-hours trading seeing a further decline of 0.35%. Year to date, the stock has surged 376.96%.

It has a 52-week range of $15.66 to $84.80 and a market capitalization of $176.47 billion. The stock’s price-to-earnings ratio stands at 410.70, with a 14-day Relative Strength Index of 56, suggesting neutral momentum, according to data from Benzinga Pro.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.