Wedbush’s Daniel Ives said he is confident that Palantir will be a core winner in the trillions of AI dollars spent over the next few years.

Palantir Technologies, Inc. (PLTR) stock traded lower in Thursday's premarket despite an analyst predicting another year of strong gains for the artificial intelligence (AI)-powered data analytics company.

Wedbush analyst Daniel Ives, who has an ‘Outperform’ rating on Palantir stock, increased the price target to $90 from $75. The analyst attributed his positive stance to his recent checks and growing confidence in the company’s AI strategy. 

The analyst said Palantir has in it to become the “next Oracle or Salesforce’’ over the coming years. 

Ives conceded that the valuation is expensive currently. The stock ended 2024 with a whopping gain of 340% and was the top S&P 500 gainer for the year. Palantir, however, has pulled back from a peak of $84.80, which it reached on Dec. 24.

Yet, Palantir’s forward price-earnings multiple is at an elevated 161.29. according to Yahoo Finance data.

The Wedbush analyst is confident that Palantir will be a core winner in the trillions of AI dollars spent over the next few years. He said, “Palantir remains one of our top names to own in 2025 as its game-changing AIP strategy is quickly becoming a key foundational platform for enterprises heading down the AI use case path across verticals.”

Ives also said new and existing customers are waiting to sign up for the multiple aspects of the company’s tech stack. According to the analyst, the Street is underestimating the more than $1 billion revenue the company’s U.S. commercial business can fetch over the next few years. 

The Trump administration’s AI focus is another tailwind for Palantir, Ives said.

The analyst said he updated his model to reflect a one-time impact of $120 million in stock-based compensation expenses, likely to be incurred in the December quarter. He added that although this will likely impact the bottom line, it is a non-event. 

“We believe this charge is well understood by the Street and will have no impact on pro forma or cash flows in the quarter,” he added.

On Stocktwits, sentiment toward the stock stayed ‘bullish’ (60) but message volume remained ‘normal.’

PLTR sentiment and message volume January 23, 2025, premarket as of 9:23 am ET | Source: Stocktwits

Stock watchers on the platform said the stock will likely push toward $100 after earnings. The company has scheduled the earnings release for Feb. 3.

In premarket trading, the stock fell 1.39% to $75.80 following the 5.20% surge on Wednesday.

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