Palantir Technologies (NASDAQ: PLTR) could see even more upside thanks to AI, according to Goldman Sachs (NYSE: GS). In fact, the firm just upgraded the software company to Buy from Neutral, arguing that its recent stock underperformance has created a more attractive opportunity.
Analyst Gabriela Borges also increased her Palantir 12-month price target to $230, arguing that the company’s potential market could expand further. Borges framed the debate around Palantir’s nearly $8 billion annualized revenue run rate and roughly 100% growth rate, as described in her notes. Those figures help explain both the excitement surrounding the business and the questions about what comes next.
Sovereign AI Creates a New Growth Opportunity
Goldman highlighted three areas that could expand Palantir’s opportunity: sovereign AI, customized applications, and a strategy focused more closely on individual industries.
Sovereign AI broadly involves countries seeking greater control over their AI capabilities, infrastructure, and data. For software providers, that can create opportunities to help organizations deploy AI while meeting their operational and security requirements.
Customized applications address another practical challenge. Businesses have different systems, responsibilities, and problems. An AI tool that works well for one organization may need substantial adjustments before it becomes useful somewhere else.
Palantir’s Engineers Give It a Competitive Edge
Another major part of Goldman’s argument involves Palantir’s forward-deployed engineers, or FDEs. These engineers work closely with customers to understand their operations and help turn software into practical solutions. That hands-on approach matters because installing technology and getting useful results from it are separate challenges.
A customer might have valuable information scattered across several systems. Employees may also have established processes that new software needs to accommodate. Helping solve those problems can make a product more useful. It can also give Palantir valuable feedback about what customers need next.
Borges believes Palantir’s close connection between customer work and product development helps address that concern. Her argument is that the company has refined parts of the process enough to automate them through AI.
Strong Earnings and Guidance Support the Bull Case
In its most recent quarter, the company posted EPS of 41 cents, beating estimates by six cents. Revenue of $1.94 billion, up 94% year over year, beat by $130 million.
“Demand for AI sovereignty has now been unleashed. And Palantir is the only company that has demonstrated it can transform tokens into actual economic value. Our customers trust us to provide them with maximal control over their operations, data, and decisions. Their competitive advantage should never become the training data for future models. This quarter was otherworldly: our U.S. commercial revenue grew 149% year-over-year, our overall revenue grew 93% year-over-year, and our Rule of 40 score climbed to 155%. The sovereign AI revolution makes us very optimistic about the future,” added Alex Karp, Co-Founder and Chief Executive Officer of Palantir Technologies.
Looking ahead to the third quarter, Palantir expects revenue to be between $2.16 billion and $2.164 billion, above the $2 billion estimate. Palantir expects adjusted operating profit during the period to be between $1.29 billion and $1.3 billion, above the $1.14 billion estimate. For the full year, Palantir now expects sales to be between $8.15 billion and $8.16 billion, above the previous range of $7.65 billion to $7.66 billion.
PLTR Stock Tests Key Resistance
PLTR stock has regained strong upward momentum, with PLTR closing at $201.41 on Oct. 8 and trading well above its 50-day simple moving average of $175.30. The chart shows a clear series of higher highs and higher lows since the sharp recovery that began in August.
The latest move has pushed PLTR back toward the $205 area, which represents an important resistance zone near its prior high. A decisive breakout above that level could put the psychologically important $210 mark in focus.
On the downside, the $190 area offers an initial level to watch if the stock pulls back, while the rising 50-day moving average around $175 provides a deeper technical support level. Overall, the trend remains bullish as long as PLTR stays above its rising 50-day average.
What Investors Should Watch Next
Goldman’s upgrade gives investors a clear thesis to evaluate: a larger market, more specialized applications, and potentially more efficient delivery.
The next step is watching whether business results support those expectations. Revenue growth matters, but so do profitability, customer expansion, and the resources required to deliver that growth. Palantir’s opportunity is compelling because businesses need help turning AI spending into useful results. Its challenge is delivering those results consistently while meeting the expectations attached to its stock.
