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Investing.com -- Palantir Technologies is a high-risk but potentially transformative investment, according to Piper Sandler, which initiated coverage with an Overweight rating and a $170 price target in a note Friday.
“We see PLTR as an AI secular winner,” analysts wrote, calling the company “a one-of-a-kind growth+margin model that if proven durable could grow into a $24B run-rate by CY32E via share gains across two $1+ trillion TAMs.”
The firm said Palantir (NASDAQ:PLTR) is “powering the AI revolution” and could benefit from long-term structural demand.
Piper Sandler noted it has tracked Palantir for more than five years, from its time as a “coveted late-stage private” to its direct listing in 2020, and through a “trough of disillusionment” in late 2022 when the stock fell to $6.
That pessimism has since reversed in what analysts describe as a “‘rise of the phoenix’ moment where PLTR has been crowned an AI All-Star on accelerating growth.”
Despite that optimism, Piper Sandler warned that the stock is not for the faint-hearted.
“No doubt, PLTR carries a rich valuation premium and remains a high-risk investment,” the note said, adding that shares are “hyper-volatile with a dozen 20-29% drawdowns.”
The firm recommends a cautious approach to building exposure. “We recommend investors be patient and take a ‘buy on a drawdown’ approach to build new positions,” it said.
Piper Sandler’s bullish thesis hinges on Palantir’s ability to expand across massive addressable markets and maintain its current pace of profitability and growth.