Shares of data analytics platform Palantir (PLTR) have bucked the trend of tech names getting scorched in 2025, with a dizzying rally of 70.6% this year. Moreover, after the company's blowout Q1 earnings report, widely followed tech analyst Dan Ives of Wedbush has turned even more bullish on the Peter Thiel-backed company, deeming PLTR stock as one of the “strategic winners” in the artificial intelligence (AI) battle.

With many on Wall Street still warning of PLTR's steep valuation, what has Ives so convinced of Palantir's bullish prospects? Let's have a closer look.

PLTR Reports an Upbeat Q1

On May 5, Palantir continued its streak of reporting quarterly results that exceeded expectations. Total revenues climbed to $884 million, marking a robust 39% increase over the prior-year period. The Government division generated $373 million, while the Commercial segment contributed $255 million, translating into year-over-year growth of 45% and 71%, respectively.

Adjusted earnings of $0.13 per share reflected yearly growth of 62.5%, matching the consensus estimate. Notably, the company's EPS has beaten estimates in four out of the past five quarters.

Net cash from operating activities was at $310.3 million, up from $129.6 million in the year-ago period. Overall, Palantir ended the quarter with a cash balance of $993.5 million, with short-term debt of just $44.4 million.

Palantir reported growth in some key operational metrics as well. Notably, the company recorded a 39% year-over-year increase in its customer base to 769, accompanied by a substantial surge in U.S. commercial total contract value (TCV), which reached $810 million, representing a 183% jump compared to the same period last year.

Even more encouraging, Palantir raised its revenue guidance for the full year to a range between $3.890–$3.902 billion. For the second quarter, the company expects revenue to be between $934–$938 million, marking 47.6% annual growth at the midpoint. 

Strategic Growth Drivers for Palantir

As a callback to my previous analysis, Palantir's close relationship with the federal government acts as both a boon and a bane for the company, at least in terms of perception. However, the company's knack for constant innovation and offering of a reliable suite of products and services is leading to increasing enterprise adoption with its Foundry platform.

Moreover, Palantir is in the midst of a deliberate evolution as it transitions from its original focus on developing isolated digital replicas tailored for individual enterprises to becoming the central integrator of a broader, interconnected ecosystem of digital twins. Traditionally, its platforms enabled businesses to simulate real-world operations such as logistics or manufacturing processes within standalone models. Each deployment was self-contained, lacking interaction with other enterprise systems. Today, Palantir is extending the capabilities of its Foundry, Gotham, and AIP platforms to establish interlinkages across these digital constructs, enabling data to flow not just within organizations but across value chains, from suppliers to customers to regulators.

This strategic progression reflects the company’s long-term ambition: to lay the groundwork for a shared digital infrastructure across industries where collaborative decision-making and synchronized efficiencies become possible through seamless data exchange, far beyond what isolated systems could previously achieve.

Simultaneously, Palantir has been ramping up its enterprise engagement through AIP boot camps, offering potential clients hands-on exposure to how its platforms integrate proprietary enterprise datasets with foundation model technology, thereby accelerating adoption and shortening enterprise sales cycles.

Having said that, valuation concerns continue to haunt Palantir, which carries a steep forward adjusted price/earnings (P/E) ratio of 203.59. Not only is that more than 9x the industry average, it's 61% higher than even PLTR's own inflated historical valuations. In other words, investors are paying a steep premium for Palantir's expected earnings growth.

However for many bulls - including Wedbush's Dan Ives - Palantir’s entrenched role within national security and advanced data analytics, alongside increasing global defense expenditures, underpins its appeal as a long-term investment, even as its valuation remains elevated.

Analysts' Opinions on PLTR Stock 

On average, Wall Street analysts have deemed PLTR stock a “Hold,” with only three “Strong Buy” ratings, 12 “Holds,” one “Moderate Sell” rating, and four “Strong Sell” rating. 

The mean target price is $91.11, which the shares have long since surpassed. While Ives has an ambitious price target of $140 for PLTR, Bank of America on Monday set a new Street-high price target of $150, which implies additional upside of about 17% from current levels.