DA Davidson was promoted Palantir (NASDAQ: Picture of PLTR) to ‘Buy’ from ‘Neutral’ on July 2, raising his target price for Palantir from $165 to $175.
As part of the strong call, analyst Gil Luria said the company’s rapid growth has helped to justify its initial valuation, with some competitive advantage in sight.
According to the analyst, Palantir’s biggest advantage lies in its position as artificial intelligence (AI) calling platform rather than providing a single version of the main language.
In particular, Luria believes that as businesses adopt AI strategies, many are finding they need an orchestrated team that can manage multiple types of AI instead of relying on a single agent, which is where Palantir steps in.
“Palantir has many competitive advantages over other software companies, which are becoming increasingly popular in the era of AI. Recently, the recognition of business customers that the orchestration team is important underlines the importance of Palantir. With this in mind, we are raising our rating to buy from Neutral and raising our price from $1657,” Luria wrote.
Palantir’s price has been raised on the stock exchange
Luria noted that Anthropic has provided additional evidence to support Palantir’s business model.
As such, he noted that government restrictions affecting Anthropic’s AI solutions have highlighted the risks businesses face by building software directly on top of a provider’s boundary model. To combat this problem, Palantir allows customers to automatically change the default AI model with minimal disruption.
Luria said this reduces the likelihood that customers will bypass Palantir and work directly with model developers such as OpenAI or Anthropic, which is often cited as one of Palantir’s biggest threats.
“In contrast, a company that built its business on a call tool, like Palantir, would be able to make a few changes as Palantir changes the AI models under its solution. Luria added.
Palantir’s stock price raised by Wall Street analysts
Looking at what other analysts have been saying recently, Wall Street seems to view Palantir as a ‘Moderate Buy,’ with an average target price of $181.64 for the next twelve months. TipRanks.
That is, 20 analysts, on average, see PLTR shares making 44.64% in the next year. Fourteen of them recommend buying, four say hold, and two are against selling the stock.
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