The software company's shares have gotten off to a strong start this month following a weak run in June
Palantir's stock was up 4% on Thursday after D.A. Davidson analyst Gil Luria upgraded it to buy from neutral.
Palantir's stock is charting a comeback from its worst month in over five years.
The latest catalyst is an upgrade from D.A. Davidson analyst Gil Luria, who wrote that Palantir (PLTR) has a number of advantages over all other software companies in the artificial-intelligence era.
Shares of Palantir are up 4% in Thursday morning trading and ahead 12% so far in July. They are also up 21.4% from their 52-week closing low hit on June 25, according to Dow Jones Market Data.
Last month, investors broadly dumped software stocks as they poured money into semiconductor plays. But now they're giving Palantir and the rest of the software sector a fresh look.
Luria argued that Palantir stands out from its peers. Anthropic's feud with the U.S. government has led enterprise customers to realize the risks that come with building a business directly on top of OpenAI or Anthropic's models. Palantir can cash in on that concern by offering an alternative for companies to build AI models on its orchestration tool, according to Luria.
He wrote that enterprises don't want to be linked to just one AI model, which removes the biggest threat for Palantir - that companies will simply go to Anthropic and OpenAI to "solve their biggest problems."
A company that has built its business on an orchestration tool - like Palantir's - would only face a "minor transition" in the face of a model shutdown, while affording customers flexibility to switch easily to another model. Palantir has orchestration tools that help run or "orchestrate" AI agents across its data platforms.
Palantir's competitive moat also lies in its ability to combine and organize data for customers "without sacrificing their integrity, privacy and security," according to Luria.
He said Palantir is leveraging the "right strength at the right time," as companies are realizing that in order to use AI tools, it's necessary to gather underlying data in one place, something Luria said can be "frustrating" and a "multiyear journey" for users.
Luria lifted his rating on Palantir's stock to buy from neutral and raised his price target to $175 from $165. The new target implies 34% upside from current levels.
Palantir's recent stock momentum may also stem from the company's announcement on Monday of a new strategic partnership with Nvidia (NVDA) to build AI models for the U.S. government.
Discussing the announcement on CNBC on Wednesday, Palantir CEO Alex Karp said that "to make [large language models] valuable in a battlefield context, or regulated context, or manufacturing, you have to have what's called an application layer."
"Everyone who uses LLMs on the battlefield runs on top of our Ontology," he said, referring to Palantir's software offering that acts as a "digital twin" or representation of a business and its operations in the form of data. According to Karp, the tool makes AI models "safe and useful and precise."
He said the benefit of an application layer like Ontology is that it ensures the LLM doesn't touch the customer's underlying data. It also doesn't transfer the customer's intellectual property, which may include top-secret or clinical data.
He said Palantir is "completely agnostic" as to which model customers operate on.
-Hannah Pedone
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(END) Dow Jones Newswires
July 02, 2026 11:15 ET (15:15 GMT)
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