Palantir Technologies has been on a tear lately. Shares have been up for three consecutive days, gaining nearly 18%. On Thursday, the stock closed at its highest level since late February, and analysts said they believe it could return to its record high of near $125, implying a 16% upside potential.

President Donald Trump said Wednesday that his team was "actively" talking to China about trade, according to media reports. He promised earlier in the week that taxes on Chinese imports would come down "substantially."

Palantir has outperformed the broader market this year, rising just shy of 40%. By comparison, the S&P 500 and Nasdaq Composite have fallen 7.7% and 12%, respectively.

It seems the good times are set to continue, as Piper Sandler analysts noted on Thursday that Palantir shares appear to have broken out from a so-called falling wedge formation, a reversal that indicates potential gains.

Piper Sandler said the stock appeared to be moving towards its February highs and that it "appears likely" it would test those levels. Palantir notched a record closing high of $124.62 on Feb. 18.

Since then, the price has fallen some. Concerns about the impact of government funding cuts on the company's profits as well as the stock's high valuation, have taken a toll on shares.