Deutsche Bank lifts Palantir to Buy after "exceptional" Q2

Investing.com -- Deutsche Bank upgraded Palantir to Buy from Hold in a note on Tuesday, calling the software company's second-quarter results exceptional and arguing it is operating well ahead of the rest of the sector in turning AI demand into customer value.

Analyst Brad Zelnick said the quarter was strong "even by the company's own increasingly anomalous standard," reinforcing the view that Palantir is "operating several steps ahead of the rest of Software in converting AI demand into real customer value."

He likened the company to "a time traveler, having already arrived in the AI future others are still aspiring towards," and maintained a $200 price target on the stock, implying 59% upside.

Revenue growth accelerated 8 points to 93% year over year, Deutsche Bank noted, led by U.S. Commercial, where revenue jumped 149%. The segment posted record total contract value of $2.132 billion, up 153%.

The firm highlighted Palantir's Sovereign AI capabilities and its AIP platform, which management framed as an environment where customers build, deploy and improve AI workflows "inside their own security boundary."

Zelnick said AIP is emerging as "the control plane for enterprises that want to use the best available models without giving away the proprietary data," extending Palantir's differentiation into AI governance.

Deutsche Bank added that Palantir's financial profile is "further separating from the broader Software group and should command a premium valuation." With shares trading at about 1.5 times its fiscal 2027 estimate on one metric, the firm said risk/reward skews favorably, supporting its DCF-derived target.

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