Investors should scoop up shares of Palantir Technologies given their attractive valuation and the company's advantages over rivals, according to D.A. Davidson. Analyst Gil Luria upgraded the AI and defense software stock to buy from neutral. His new price target of $175, up from $115, signals upside of 39% from Wednesday's close. Palantir has struggled in 2026, dropping more than 29% as investors fear companies will increasingly turn to AI models from OpenAI and Anthropic for their software needs. However, Luria thinks tensions between Anthropic and the U.S. government "illustrate precisely why customers will use Palantir as a way to orchestrate AI models." Anthropic said this week the Trump administration lifted export controls on its Claude Fable 5 and Mythos 5 models, ending a standoff between the company and the White House. "Anthropic's repeated choice to take a confrontational tact with the US government has resulted in the government placing restrictions on AI models and Anthropic pulling its own model from the market. If an enterprise customer built its business directly on top of these models, the disruption to their business could have been catastrophic," he said. "In contrast, a company that built its business on an orchestration tool, such as with Palantir, would only experience a minor transition as Palantir swaps the AI models underneath its solution." On top of that, Luria said Palantir's valuation has become more attractive with profits soaring and its share price dropping. The stock trades at a forward price-to-earnings ratio of around 71, per FactSet. That's well below a peak above 250 seen in early November. "We believe Palantir's valuation is the most attractive it has been in a while, especially in relation to other high growth software companies," the analyst said. Palantir shares rose more than 3% following the upgrade. Most analysts covering Palantir are bullish. LSEG data shows that 21 of 33 rate it a buy or strong buy. Another 10 have a hold-equivalent rating on it. The remaining to assigned underperform and sell ratings.
<small>Source: CNBC</small>
