1. Palantir Technologies Inc. (NASDAQ:PLTR)
5-Year Share Price Return: 474.05%
On February 27, UBS upgraded Palantir Technologies Inc. (NASDAQ:PLTR) to Buy from Neutral. The firm set a $180 price target on the stock. UBS said the upgrade reflects the stock’s valuation after a 35% decline from its peak. The analyst described Palantir as a “premier growth story” in software and said it sits “at the nexus of the two most powerful spending trends – AI and Data.” UBS said current valuation levels make the shares “very attractive,” based on its forecast for 70% revenue growth in 2026 and stable margins in the mid-50% range. The firm also said its latest checks indicate that Palantir is “facing a very strong demand backdrop.”
CNBC reported on February 27 that Palantir could benefit from a dispute between Anthropic and the US Department of Defense. Anthropic refused to remove safeguards from its AI model for unrestricted military use. This has led the Department of Defense to explore alternatives, including OpenAI and Google. If Palantir integrates these AI models into its platforms, its role as an infrastructure provider could expand.
The report also noted that Palantir’s long-term growth is increasingly supported by its commercial business. At the same time, additional defense contracts could strengthen its leadership in military AI. CEO Alex Karp’s continued support for defense partnerships has helped position the company in this area. It also described an options strategy using a three-leg debit spread to gain exposure to the stock while limiting downside risk. The trade had a net cost of $3.50 per spread and offered defined downside risk, with unlimited upside if the stock rose above $143.50.
Palantir Technologies Inc. (NASDAQ:PLTR) develops software platforms that support counterterrorism investigations and operations. Its main platforms include Palantir Gotham, Palantir Foundry, Palantir Apollo, and the Palantir Artificial Intelligence Platform.
While we acknowledge the potential of PLTR to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than PLTR and that has 100x upside potential, check out our report about this cheapest AI stock.
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