Palantir's stock has more than quadrupled over the past year but still has room to run, according to Wedbush.
The explosive rally in Palantir Technologies Inc. shares has meant that even the most bullish analysts had price targets below where the stock was trading over the past month.
But now there is one analyst who's again projecting upside: Wedbush's Daniel Ives boosted his target price to $90 on Thursday morning.
The next highest target listed on FactSet is $72, from a Cantor Fitzgerald analyst who weighed in last week with a neutral stance on the stock.
Ives was effusive as he cheered Palantir's opportunity in artificial intelligence with its software offering known as AIP. "Palantir remains one of our top names to own in 2025 as its game-changing AIP strategy is quickly becoming a key foundational platform for enterprises heading down the AI use case path across verticals," Ives wrote.
Over the next few years, AIP can drive a revenue stream upward of $1 billion for Palantir's U.S. commercial business, Ives said, adding that Wall Street is underestimating that potential - as well as the moat around Palantir's business.
The government business looks to be in good shape too, Ives wrote.
"The stepped-up AI investments now being seen under the Trump administration with Project Stargate should benefit Palantir on the government vertical," he said. "In essence, Palantir is in the sweet spot to benefit from a tidal wave of federal spending on AI."
Ives also addressed the elephant in the room: the stock's valuation. Palantir's "valuation is expensive today," he wrote, but the company has the potential to be "a core winner in the trillions of AI spend over the next few years" and the opportunity "to become the next Oracle or Salesforce."
As Palantir's stock has surged, its forward price-to-sales ratio has climbed to 49.2 from 14.3 a year ago. For comparison, the S&P 500's SPX forward price/sales ratio is 3.0, while Tesla Motors Inc.'s is 13.2 and NVIDIA Corp.'s is 18.3, according to FactSet data.
Last week, after Palantir's multiple had compressed slightly, bearish analyst Brent Thill of Jefferies still warned about the valuation, noting, "We are now in a more normalized macro environment, and we think any negative factors," such as interest-rate changes, AI caution or insider selling, could pressure the multiple.
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