Why Palantir stock soared today

What happened

Shares of Palantir Technologies (NYSE: PLTR) rose on Thursday, following positive remarks from analysts. By the close of trading, the stock price was up 3.8% after rising 6.3% earlier in the day.

So what

Raymond James Financial Analyst Brian Gesuale gave Palantir shares a strong buy rating. He sees the data analytics provider’s stock price hitting $20 in the coming year. If he’s right, investors could enjoy more than 90% gains from the stock’s closing price of $10.49 on Thursday.

Gesuale is intrigued by Palantir’s ability to help businesses and government agencies aggregate, analyze and protect their ever-growing data collections. He also praised the steps Palantir has taken to simplify its software tools, which should allow it to be used by more people with little or no programming experience.

Additionally, Gesuale believes that the risk-reward profile for investors is now more attractive following Palantir’s sharp drop earlier this year. Even after today’s gains, its stock price is down more than 60% from the highs reached in September.

Gesuale argues that Palantir stock is now a compelling buy given its projected 30% annual growth rate through 2025, a high level gross marginsand a huge total addressable market of $120 billion.

Now what

Gesuale isn’t the only analyst optimistic about Palantir’s prospects. Bank of America Analyst Mariana Perez Mora placed a buy rating on her stock in late June. While not as bullish as Gesuale, Perez Mora sees Palantir shares rising about 24% to $13, driven by strong demand for its AI-powered data solutions.

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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Joe Tenebruso has no position in the stocks mentioned. The Motley Fool holds positions and recommends Palantir Technologies Inc. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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