Palantir’s (NASDAQ: PLTR) remains one of the market’s most polarizing AI plays, but Piper Sandler sees its potential as transformative.
In a note published Friday, the firm initiated coverage on Palantir with an Overweight rating and a $170 price target, implying a roughly 10% upside from current levels.
“We see PLTR as an AI secular winner,” analyst Brent Bracelin wrote, highlighting the company’s opportunity to gain share across two $1+ trillion total addressable markets (TAMs).
He credited Palantir’s expanding role in powering enterprise and government AI adoption, calling it a central force in what the firm describes as the “AI revolution.”
The firm has tracked Palantir for more than five years, from its days as a “coveted late-stage private” company to its direct listing in 2020. It also noted the “trough of disillusionment” in late 2022 when the stock fell to $6, a period that has since given way to what Bracelin described as a “rise of the phoenix”moment, with Palantir now crowned an AI All-Star amid accelerating growth.
Piper Sandler cautions PLTR stock as ¡a high-risk investment’
Still, the note came with strong caution.
“No doubt, PLTR carries a rich valuation premium and remains a high-risk investment,” Bracelin wrote, warning that the stock’s hyper-volatility, which has seen a dozen drawdowns of 20–29% makes it unsuitable for risk-averse investors.
That caution is underscored by Palantir’s current valuation. The stock trades at a trailing P/E of 336x, a level approaching that of the combined “Magnificent 7” average at 342x.
Piper Sandler advises a measured approach. “We recommend investors be patient and take a ‘buy on a drawdown’ approach to build new positions,” the note said.
The dual message from Piper Sandler reveals the tension around Palantir: a company with outsized potential in the AI space, but one whose stock continues to demand both conviction and resilience from those willing to own it.
