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Canaccord Genuity has maintained its Hold rating on Surf Air Mobility Inc (NYSE: SRFM), with a steady price target of $2.20.
The firm observed that Palantir Technologies (NYSE:PLTR) has received approximately 1.3 million additional shares of Surf Air Mobility's common stock as part of their commercial agreement, as revealed in recent SEC filings.
This transaction increases Palantir's ownership in Surf Air Mobility to roughly 18.5%, equating to about 2.73 million shares out of the 14.8 million shares outstanding.
The acquisition of the additional shares by Palantir was made as a form of payment for outstanding receivables owed by Surf under the two companies' collaboration, Surf Air Technologies.
Canaccord Genuity notes that Palantir's decision to accept stock as payment instead of cash could be seen as a sign of confidence in Surf Air Mobility's commercial prospects, especially in terms of utilizing Palantir's technology stack.
Under the terms of the commercial arrangement, Palantir is entitled to receive shares of Surf's common stock or cash in exchange for providing certain services, which includes the ongoing development of regional flight booking and operations software.
The valuation of the shares provided to Palantir was based on the lower of either the 5-day volume-weighted average trading price ending on the day before issuance or the closing price on the day before issuance. Consequently, Palantir was able to acquire 1.27 million shares at a rate of $1.25 per share.
In other recent news, Palantir Technologies Inc . has been making significant strides in artificial intelligence (AI) and machine learning. The company has formed a strategic partnership with Edgescale AI Inc. to launch Live Edge, a platform that combines Palantir's Edge AI with Edgescale AI's infrastructure technology. This collaboration aims to enable the practical application of artificial intelligence in sectors such as manufacturing and utilities.
Additionally, Palantir's second-quarter fiscal year 2024 earnings saw a 27% year-over-year increase, totaling $678.1 million in revenue. This strong performance led to an upward revision of its full-year revenue guidance to $2.746 billion. The company also secured a significant $99.8 million military AI contract expansion from the DEVCOM Army Research Laboratory and a multi-year contract with Nebraska Medicine to implement its AIP.
In terms of financial analysis, Raymond James downgraded Palantir from Outperform to Market Perform, while BofA Securities maintained a Buy rating, and Citi reaffirmed a Neutral rating. The company was also recognized for its achievements in the field of AI and machine learning, earning top marks in the 2024 Wisdom of Crowds® Market Study by Dresner Advisory Services.
InvestingPro Insights
While the article focuses on Surf Air Mobility's partnership with Palantir Technologies, it's worth taking a closer look at Palantir's financial position and market performance. According to InvestingPro data, Palantir's market capitalization stands at an impressive $87.09 billion, reflecting strong investor confidence in the company's prospects.
InvestingPro Tips highlight that Palantir holds more cash than debt on its balance sheet, indicating a solid financial position. This strength may have contributed to the company's willingness to accept Surf Air Mobility stock as payment for services rendered. Additionally, Palantir has shown impressive gross profit margins, which stood at 81.39% for the last twelve months as of Q2 2024, demonstrating the company's ability to maintain profitability in its operations.
The stock has also shown remarkable performance, with a one-year price total return of 134.14% as of the latest data. This aligns with the InvestingPro Tip noting Palantir's high return over the last year, which may further explain the company's confidence in accepting equity as payment.
For investors seeking a more comprehensive analysis, InvestingPro offers 22 additional tips on Palantir, providing a deeper understanding of the company's financial health and market position.
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