Palantir (PLTR) stock staged a comeback, but holding onto those gains has been tough. Its stock was up 51% in August before losing nearly 11% through Sept. 10, leaving it down 6.7% for the year, according to Yahoo Finance data.
Still, veteran DA Davidson analyst Gil Luria sees plenty of reasons to look beyond that choppy trading.
For starters, Palantir’s business has grown faster than its stock suggests. Q2 sales surged 93%, with U.S. commercial sales rising 149%, giving investors enough evidence that demand is translating into substantial growth.
Palantir is also making its AI pitch a lot more concrete. Its expanded Nvidia (NVDA) partnership, as reported by Barron’s, puts its robust software to work within the chipmaker’s walled-garden-like supply chain. At the same time, a new Nebius (NBIS) agreement offers its customers greater control over computing infrastructure and models.
It begs the question for shareholders: How much room does the business have to grow?
Following Palantir’s AIPCon 11 conference, Luria bumped his stock price target while maintaining a Buy rating. His rationale points to a bigger role for Palantir as customers become increasingly demanding about how they deploy and control AI.
DA Davidson sees a bigger role for Palantir
DA Davidson’s Gill Luria raised his Palantir stock price target to $250 from $200, which implies nearly 50% upside from the stock’s reported Sept. 11 intraday price of $166.27.
The veteran analyst’s bullishness centers on customers becoming more sophisticated regarding AI. Meanwhile, businesses are becoming more selective about choosing their models, managing their data, and retaining control over how those tools operate.
That’s essentially the risk Microsoft (MSFT) CEO Satya Nadella talked about in a July 12 essay, writing that businesses “essentially pay for intelligence twice.”
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Later, Palantir CEO Alex Karp escalated that warning, saying that businesses are paying model providers “to migrate your IP, your know-how, and your expertise to their model.”
That said, Luria sees Palantir benefiting from that trend, effectively becoming the software layer that coordinates those choices.
Its AIPCon 11 conference solidifies the firm’s view that the company has a stronger growth runway ahead.
In practical terms, that involves connecting AI to a company’s actual operations, with rules governing what information models can potentially access and what actions they can support.
The Nvidia deal offers a clear example.
The chipmakers’ supply-chain deployment layers Palantir’s software with Nemotron models to identify bottlenecks, consider alternatives, and guide materials allocation. Human experts retain the final decision-making control.
Over time, Palantir’s services could become much stickier as customers grow AI across their businesses.
Replacing such a platform might become harder once several workflows depend on it. Moreover, DA Davidson believes institutional investors might increasingly recognize that they own too little Palantir.
For perspective, Morgan Stanley raised its Palantir holdings by 5.65% to 34 million shares, while State Street added 2.86 million shares, taking its stake to 104.49 million, during the quarter ended June 30, 2026, Business Quant confirmed.
Nvidia gives Palantir a powerful proving ground
Another big piece of Luria’s bull case is Palantir’s work with Nvidia, where he believes that the companies are tackling major supply-chain challenges.
The appeal is pretty clear. The world’s largest AI chipmaker needs help coordinating the parts, suppliers, and production decisions behind its systems. Palantir has an opportunity to show its value within that process.
The scale is tremendous, with Nvidia saying that each Vera Rubin rack contains 1.3 million parts. A missing component could complicate production, which makes earlier detection of constraints incredibly valuable.
For investors, the opportunity goes beyond one specific customer. If Palantir can continue to demonstrate measurable improvements at Nvidia, that strengthens its sales pitch to manufacturers and other businesses that are managing similar complicated supply networks.
Palantir’s valuation leaves little room for error
The big question, though, is how much of Palantir’s success is already reflected in its share price.
According to Seeking Alpha, Palantir trades at 103.11 times forward adjusted earnings, compared to the sector median of 22.36. Also, its forward price-to-sales ratio is 48.68, compared with 3.34 for the sector.
For perspective, a fast-growing, highly profitable business reasonably deserves a substantial premium. However, paying nearly $49 for every dollar of expected annual revenue makes sustained exceptional performance critical to the investment case.
The historical comparison is telling as well. Palantir’s forward adjusted earnings multiple sits at around 18% below its five-year average, while its forward sales multiple is roughly 36% higher. It looks cheaper against earnings, yet remains expensive against sales.
That creates a specific risk where earnings growth might not translate into share-price gains. Hypothetically, a 20% earnings increase linked with a 25% valuation contraction might leave the stock about 10% lower.
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