DA Davidson upgraded Palantir (NASDAQ: PLTR) to ‘Buy’ from ‘Neutral’ on July 2, while raising its Palantir stock price target from $165 to $175.

As part of the bullish call, analyst Gil Luria argued that the company’s rapid earnings growth has helped justify its once-stretched valuation, with some competitive advantages now visible.

According to the analyst, Palantir’s biggest advantage lies in its position as an artificial intelligence (AI) orchestration platform rather than a provider of a single large language model.

More specifically, Luria believes that as enterprises increasingly adopt AI solutions, many are realizing they need an orchestration layer capable of managing multiple AI models instead of relying on one provider, which is where Palantir steps in.

“Palantir has several competitive advantages over all other software companies, which is becoming more pronounced in the era of AI. Most recently, the realization by enterprise customers that an orchestration layer is necessary accentuates the need for Palantir. With this in mind, we are upgrading our rating to Buy from Neutral and raising our price target to $175 from $165,” Luria wrote.

Palantir price target raised on product flexibility 

Luria also argued that Anthropic has furnished additional evidence to support Palantir’s business model. 

Namely, he claimed that government restrictions affecting Anthropic’s AI solutions have highlighted the risks enterprises face when building applications directly on top of a single frontier model provider. Combating this problem, Palantir allows clients to simply swap the underlying AI model with minimal disruption.

Luria said this dynamic reduces the possibility that customers would bypass Palantir and work directly with model developers such as OpenAI or Anthropic, which is usually cited as one of Palantir’s greatest strategic risks.

“In contrast, a company that built its business on an orchestration tool, such as Palantir, would only experience a minor transition as Palantir swaps the AI models underneath its solution. We believe this development removes the biggest perceived threat to Palantir: the notion that companies will go to Anthropic and OpenAI to solve their biggest problems,” Luria added.

Palantir stock price target raised by Wall Street analysts

Looking at what other analysts have recently been saying, Wall Street appears to consider Palantir a ‘Moderate Buy,’ with an average price target of $181.64 for the next twelve months, per TipRanks. 

That is, a total of 20 analysts, on average, see PLTR shares rallying 44.64% in the next year. Fourteen of them recommend buying, four suggest holding, and two argue for selling the stock.

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