Why Palantir Stock Popped This Week

Shares of Palantir Technologies (NASDAQ: PLTR) rose 14% this past week, following news of a potentially lucrative collaboration with an artificial intelligence (AI) giant and a bullish analyst note.

A powerful alliance

Palantir is teaming up with Nvidia (NASDAQ: NVDA) to make it easier for the U.S. government to reap the benefits of open-source AI models.

By combining Palantir's sovereign AI operating system with Nvidia's Nemotron open models and accelerated computing infrastructure, government agencies could achieve gains in cost, safety, and customization while preserving data security.

The partnership could provide a boost to Palantir's already fast-growing government division. Revenue in this segment soared 84% year over year to $687 million in the first quarter.

A new Palantir bull

D.A. Davidson analyst Gil Luria sees more reasons to be bullish on Palantir's stock.

Luria believes it makes more sense for companies to build on Palantir's platform, which offers access to a wide range of AI models from nearly all major providers, rather than directly on the models developed by the likes of OpenAI and Anthropic.

He highlighted Anthropic's confrontation with the Trump administration last month, which forced it to temporarily disable access to its models. A business that solely relied on Anthropic's model could have faced "catastrophic" disruptions, according to Luria.

On the other hand, companies that used Palantir's platform would have faced minimal downtime as it quickly shifted to alternative models.

In turn, Luria upgraded Palantir's stock from neutral to buy on Thursday and placed a $175 price target on its shares.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Palantir Technologies. The Motley Fool has a disclosure policy.