The dual engines of government and enterprise drive rapid growth! “AI application myth” Palantir (PLTR.US) bull market logic is still strong

The Zhitong Finance App learned that although the stock price of Palantir Technologies (PLTR.US), an AI application leader focusing on “AI+ data analysis,” has receded due to a large-scale panic sell-off in the global stock market caused by the recent “AI bubble argument” — those pessimistic investors generally believe that a so-called “AI bubble” is being formed that is comparable to the “internet bubble” of that year, a bear-level weapon of destruction in the market, but according to Bank of America Research (Bank of America)'s senior analyst team According to the latest research report, Palantir's fundamentals are still strong. As companies and government purchases of Palantir AI application tools continue to accelerate, there is no sign of the company's growth slowing down to any extent.

Bank of America analysts said that Palantir Technologies' rapid revenue growth over the past few quarters showed no signs of slowing down, mainly because the company is experiencing strong adoption of its artificial intelligence application software products at the enterprise level, while the number of federal government contracts and actual sales volume that the company has won is also increasing.

Palantir's stock price has increased by more than 150% over the past year, which can be called the “bull market myth of the AI application software sector,” but many analysts believe that the stock still has room to rise, and Bank of America analysts even gave a target share price of 255 US dollars within 12 months, ranking as the highest target price on Wall Street. By the close of the US stock market on Monday, Palantir's stock price had closed at around 183 US dollars. Since this year, driven by a super boom in AI applications that continue to be popular around the world, the stock price has risen by more than 140% since 2025, and the valuation as estimated by PE is at an all-time high.

The so-called “seven tech giants”, or “Magnificent Seven,” which account for the high weight of the S&P 500 Index and the Nasdaq 100 Index (about 35%), include Apple, Microsoft, Google, Tesla, Nvidia, Amazon, and Facebook's parent company Meta Platforms. They are the core driving force of the S&P 500 Index to record high levels, and are also regarded by top Wall Street investment institutions as the combination most capable of bringing huge returns to investors in the context of the biggest technological transformation since the Internet era.

However, from index compilation, leading company performance/funding trends to media and buyers' statements, they all point to the same thing — the AI winner community is expanding from “core platform companies and AI GPUs” to “broader AI infrastructure+AI application software leaders.” Wall Street and the broader investment institutions' “AI investment portfolio” spillover from the “Big Seven Tech Giants” to a broader AI infrastructure and AI native application software camp shows that the “AI winner landscape” is being structurally expanded, and there are signs of sustainability.

For example, Cboe launched the “Cboe Magnificent 10 Index (Cboe Magnificent 10 Index)” index futures/options, directly including Broadcom, Palantir, AMD, etc. on the same list as the “Big Seven Tech Giants”, directly reflecting the market consensus that the biggest beneficiaries of the AI wave are not just the original seven giants, and the future AI investment landscape will inevitably spill over from the “Big Seven” to a wider AI infrastructure (computing/network/storage/cooling/cloud) and AI native application software camp.

How sacred is Palanti?

Palantir's major launch of the Palantir Artificial Intelligence Platform (AIP) in 2023 has received widespread attention and has been used on a large scale by more than 100 organizations around the world, including the healthcare and automotive industries. The company is also in talks with more than 300 additional companies. The core selling point of the AIP platform is not for Palantir to develop the Big Language Model (LLM) itself; it is more biased towards AI applications. The platform also includes AI assistants similar to ChatGPT, which can help enterprises analyze and make decisions about their big data business, and help customers efficiently use the modules and functions of Palantir platforms in a low technical manner.

Palantir's generative AI platform “AIP” is fully integrated with Palantir's existing data analysis software ecosystem. Customers can call Palantir core modules and functions through simple question and answer, enabling enterprise organizations to effectively apply generative artificial intelligence to data analysis and improve insight and operational efficiency. The platform supports a range of applications driven by artificial intelligence technology, from automated material shortage management, logistics and supply chain optimization to complex computing power scenarios such as predictive maintenance and threat detection.

Palantir's stock price has expanded rapidly since 2023. The core logic is undoubtedly the company's expanding influence in the field of artificial intelligence applications and the significant increase in market demand for the company's unique artificial intelligence ecosystem and its exclusive AI application software. Palantir's largest customers are the US government and the world's major government intelligence agencies and defense and military departments, and it also earns huge profits from the world's largest companies.

The “Warp Speed for Warships” (Warp Speed for Warships) program being promoted by the US government and Palantir, and the deepening cooperation between NATO member states and Palantir is regarded as the strongest catalyst for Palantir's stock price at present. These large-scale defense and military projects will use Palantir's AI-driven Foundry data analysis platform to transform and upgrade the maritime, land, and air forces using artificial intelligence application software ecosystems and digital technology.

Bank of America supports Palantir's stock price outlook

“We continue to see that Palantir is unrivaled in its ability to quickly bring solutions into production, and provides human-robot teams with full AI capabilities to make the most informed decisions.” Bank of America analysts said in an investor report on Monday that the team is led by senior analyst Mariana Perez Mora.

“Ontology is the key to providing a fence, training/inference tools, and incorporating feedback into the workflow for the use of AI, including LLM applications and intelligent AI. In the “build your own or buy” data operating system dilemma, time is of the essence. As the improvement of the AI application ecosystem accelerates, companies are realizing that the critical infrastructure provided by Palantir is critical for them to incorporate these rapidly evolving AI capabilities into actual workflow processing and business operations.”

In the government business sector, Bank of America highlighted the recent two-year agreement reached between Palantir and the US Navy for a period of up to 448 million US dollars.

Under a new program called Shipos, Palantir will provide the Navy with its Foundry platform and artificial intelligence AIP platform. The US Navy will use Palantir's complete AI application ecosystem to support its long-term efforts to accelerate submarine construction, betting that the AI application company's full integration of data and AI tools will help identify many bottlenecks in the tight shipbuilding supply chain. There is also an opportunity for this cooperation to be extended to surface ships.

Bank of America also said that Palantir continues to focus on improving its existing product portfolio to simplify operations while improving interoperability with open source and other types of software applications, and continues to focus on speeding up product development time and strengthening security and governance control guidelines. And these improvements require little to no additional capital expenditure.

In the past three quarters (backwards), Palantir's year-on-year revenue growth rates were 63%, 48%, and 39%, respectively, highlighting the growing demand from US companies and the federal government for the company's AI application ecosystem platform. In conclusion, Bank of America reiterated its most optimistic upward rating of “buy” Palantir shares and a target share price of up to $255.