A Wall Street analyst believes Palantir’s (NASDAQ: PLTR) expanding artificial intelligence (AI) ecosystem, marked by major partnerships, could be a key catalyst for the company’s stock growth.
The positive sentiment on the stock could serve as a significant boost for PLTR, which, despite impressive growth, has faced lingering fears of a possible crash amid concerns over potential overvaluation.
Notably, as of March 17, Palantir’s P/E ratio of 755.67 points to investor confidence but raises concerns about the overvaluation, making the equity vulnerable to a correction if expectations are unmet.
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At press time, PLTR stock was seeking to reclaim the $90 resistance level, with $100 as the next long-term target. It was trading at $87, up almost 2% from the last session. The recent bullish momentum has seen Palantir rally over 10% on the weekly timeframe.
Analyst updates PLTR stock
Regarding the stock’s outlook, William Blair analyst Louie DiPalma reiterated a ‘Market Perform’ stance on PLTR.
The analyst highlighted Palantir’s newly announced partnership with Databricks, describing it as a sign of an expanding AI ecosystem rather than a direct go-to-market collaboration.
The partnership between the two data rivals will integrate Palantir’s Artificial Intelligence Platform (AIP) with Databricks’ Data Intelligence Platform, allowing joint customers to leverage both technologies through Delta Sharing.
While acknowledging the rivalry between the two companies, especially in Department of Defense analytics applications, DiPalma noted that both platforms are gaining market share and rarely compete in direct bidding.
“We are under the impression that Palantir and Databricks rarely see each other in bidding situations, because of this large addressable market. Since there are now many joint customers, such as BP and AT&T, it makes sense for both of their data platforms to work together via Delta Sharing,” DiPalma said.
Additionally, the analyst emphasized Palantir’s strong financial outlook, pointing to the company’s 31% revenue growth guidance and 45% operating margin for 2025, which he considers among the best in the software industry.
Palantir’s recent AIPCon conference showcased new customer acquisitions, including Qualcomm (NASDAQ: QCOM) and Epirus, which William Blair highlighted as a sign of the technology entity’s growing commercial momentum. The American software provider has since updated its commercial tracker to reflect these additions.
However, DiPalma warned that Palantir’s high correlation with the Nasdaq-100 makes it susceptible to sharp declines if the broader market weakens. He noted that the stock’s 10% drop during the Nasdaq’s 4% selloff on March 13 reflected this volatility.
Wall Street divided on Palantir stock
Generally, while Palantir has recorded impressive stock growth, Wall Street remains divided on the company’s prospects.
As reported by Finbold, on February 19, Jefferies software and internet researcher Brent Thill maintained an “Underperform” rating on Palantir, raising concerns over insider selling and valuation. Thill highlighted that CEO Alex Karp sold $45 million in shares over two weeks, adding to over $2 billion in stock sales throughout 2024.
While Palantir’s AI-driven growth excites many analysts, Jefferies flagged these insider transactions as a red flag, contrasting them with Salesforce’s CFO buying shares and suggesting differing confidence levels in their respective futures.
In contrast, on March 3, Wedbush analyst Dan Ives reaffirmed an “Outperform” rating on Palantir, naming it one of the “top names to own in 2025” despite recent stock volatility. While shares have tripled in value over the past year, they have pulled back following reports of proposed Pentagon budget cuts.
However, Wedbush argued that Palantir’s AI platform and a potential efficiency push by the Donald Trump administration could position it to benefit from a surge in federal AI spending, even as other contractors face reductions. The firm maintained a $120 price target.
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