Palantir stock is poised to get a lift from a federal AI spending "tidal wave" with the Trump Administration's Stargate initiative, an analyst said this week.
Wedbush analyst Daniel Ives raised his price target for Palantir to $90 from $75, saying the company will be "a core winner in the trillions of AI spend over the next few years." Palantir, which builds platforms that enable companies and government agencies to process huge amounts of data, will likely benefit from the AI infrastructure project, Ives said in a Wednesday client note.
Project Stargate is being led by SoftBank, OpenAI, Oracle and MGX, who are the project's initial equity funders. In addition, Arm, Microsoft and Nvidia are technology partners.
Ives said Stargate "should benefit Palantir on the government vertical as more focus within the Beltway heads down the strategic AI infrastructure build-out stage."
Palantir Stock: In The 'Sweet Spot'
"In essence, Palantir is in the sweet spot to benefit from a tidal wave of federal spending on AI," Ives said. Meanwhile, he maintained an outperform rating on the stock.
Palantir stock rose more than 1% to 77.86, on track for a seventh straight daily gain as it climbs through the second week of a rebound from 10-week support. The shares continued rising on Friday, up nearly 2% in morning trades.
The rebound from support underlines institutional support and Palantir stock's staying power amid recent worries that it is overvalued.
Previously, the stock faded from late December to early January as some analysts cautioned investors against chasing Palantir gains. But Palantir has bounced back, joining a tech rally triggered by the Stargate news.
Palantir stock's Relative Strength Rating has edged back to a perfect 99, according to IBD MarketSurge, after dipping to 98 three months ago.
