Palantir stock earns new Street high target at Bank of America

Bank of America raised its price target for Palantir (NYSE:PLTR) to a new Street-high of $50 per share (up from $30) in a note Tuesday, reiterating its Buy rating on the stock.

The bank views Palantir’s inclusion in the S&P 500 as pivotal, describing it as a “watershed moment” for institutional investors to reassess the company’s long-term potential, which they believe has been fundamentally misunderstood.

Analysts compare Palantir’s current situation to the early days of mobile phones, stating, “Early estimates also failed to anticipate the world of apps, streaming, smart devices, and ultimately how this new product would bring forward the first trillion-dollar company.”

They believe Palantir is similarly poised for significant growth.

Bank of America highlights Palantir’s core technological strength, particularly its “Ontology” platform, which creates a unique ecosystem to harness data and automation for better decision-making.

“We view PLTR as a key enabler of the safe and secure implementation of machine learning (ML), AI, and upcoming data science capabilities (like imminent quantum computing,” analysts write, emphasizing that the company’s approach has been 20 years in the making.

What sets Palantir apart, according to the note, is its unconventional sales approach, where engineers work directly with customers to create tailored solutions that add real value.

This is said to deepen the relationship between Palantir and its clients, fostering long-term success.

“We think this method makes Palantir solutions significantly more relevant to the users and gives PLTR stronger pricing power,” Bank of America explains, pointing to the company’s 35% operating profit margin as evidence of the strategy’s effectiveness.

Analysts see Palantir’s business model as a key differentiator, particularly in a competitive software market where profitability often hinges on reaching a large customer base.