Palantir Technologies is positioning itself to capitalize on growing demand for cheaper, more flexible artificial-intelligence systems, a shift that analysts said could fuel another wave of growth for the software company.
Baird analysts raised their price target for Palantir to $250 from $200 on Monday, representing 20% upside from the stock's closing price of $209.05 on Friday. Analyst William Power wrote that cheaper AI models could provide further growth for Palantir by encouraging more business to adopt AI. He pointed to defense contractor L3Harris Technologies, which said Palantir helped reduce its AI processing costs by 95%.
Palantir's software allows businesses to incorporate AI models from different developers into their operations, rather than relying on a single provider. Baird said as those models become cheaper and more widely available, companies could expand their use of AI, creating more demand for Palantir's services.
"We believe the shift to open-weight models could unlock a new major chapter for AI adoption, and Palantir is at the forefront of enabling it," analysts said.
Palantir stock fell 0.9%. Shares have risen 17% this year and 11% in October so far.
It's the latest sign of optimism from Wall Street. Last week, Goldman Sachs analyst Gabriela Borges raised her rating on Palantir shares to Buy from Neutral with a $230 price target. Borges argued Palantir's potential market is poised to expand as governments and businesses increasingly seek greater control over their AI systems.
Barron's lauded Palantir stock last week as shares traded at about 13 times estimated 2030 earnings at the time.
Separately, Palantir and Ondas announced Monday the formation of Regna AI, a private company they said will help governments and businesses develop AI systems they can control and operate independently of outside AI providers.
Regna AI will initially be wholly owned by Ondas, while Palantir will supply AI infrastructure and engineering expertise to develop and deploy the systems, the companies said. Ondas will also be Regna AI's first customer.
Shares of Ondas were flat.