Palantir shares have struggled this year. D.A. Davidson says buy the dip

§ 01 Executive Snapshot

• What: D.A. Davidson upgrades Palantir Technologies to a 'buy' rating amid attractive valuation.
• Who: Analyst Gil Luria from D.A. Davidson, Palantir Technologies.
• Why it matters: The upgrade signifies confidence in Palantir's ability to compete in the AI and defense software market despite recent stock struggles.

§ 02 Key Developments

• D.A. Davidson raised Palantir's price target to $175, indicating a potential upside of 39% from the previous close.
• Palantir's shares have dropped more than 29% in 2026 due to fears of competition from AI models by OpenAI and Anthropic.
• Analyst Gil Luria highlighted that tensions between Anthropic and the U.S. government may drive customers to prefer Palantir for AI orchestration.
• Palantir's stock trades at a forward price-to-earnings ratio of around 71, significantly down from a peak above 250 in November.
• LSEG data shows that 21 out of 33 analysts rate Palantir as a buy or strong buy, indicating overall bullish sentiment among analysts.

§ 03 Strategic Context

• Historical struggles of Palantir's stock have been attributed to competitive pressures in the AI landscape, particularly from companies like OpenAI and Anthropic.
• The recent upgrade reflects broader market dynamics where government relations and AI model stability are crucial for enterprise software customers.

§ 04 Strategic Implications

• Immediate market consequence includes a potential rally in Palantir's stock price following the upgrade, signaling renewed investor interest.
• Long-term implications suggest that Palantir's orchestration capabilities may enhance its market position against competitors reliant on proprietary AI models.

§ 05 Risks & Constraints

• Potential regulatory risks related to government relations and AI export controls could impact Palantir's operations.
• Competitive pressures from other AI firms continue to pose a risk to Palantir's market share and growth trajectory.

§ 06 Watchlist / Forward Signals

• Monitor the performance of Palantir's stock against the new price target of $175 for signs of market recovery.
• Watch for developments in government relations concerning AI models that may affect enterprise customer decisions regarding Palantir's software solutions.