Does Palantir (PLTR) Really Have What it Takes to Hit $200?

Palantir (NASDAQ:PLTR | PLTR Price Prediction) stock has continued to defy the laws of gravity through the summer, gaining another 60% in the past three months, putting Alex Karp’s AI analytics firm up north of 520% in the past year. With an impressive AI Platform (AIP) in place that could spark even more growth and frequent government contract wins, it feels like the company has all the right drivers to continue its meteoric rise all the way to a $1 trillion market cap.

Another price target hike for those red-hot shares of PLTR

For Wall Street analysts covering the name, it’s all about revising upward and raising the bar on the price target every few months or so. With the latest post-quarter melt-up in the stock, shares now go for $186 and change. Wedbush Securities analyst Dan Ives, one of the biggest bulls since the AI boom began, hiked his price target on PLTR to $200 per share. Indeed, Palantir’s glorious rally isn’t going to last forever.

Even with its expanding AI growth drivers in place and room to run in the realm of government, defense, and commercial, expectations will one day exceed the actual results, and the PLTR trade will finally unravel. At this phase in the AI boom, though, we still may be far off from such a scenario, especially as AI shows Wall Street that it can, in fact, produce a respectable return on investment.

Dan Ives calls for $200 per share, then a $1 trillion market cap

In any case, Ives, who’s one of the best tech analysts on Wall Street, still thinks it’s early days for AI as well as Palantir’s boom. In fact, it was Ives who just called for Palantir to join the $1 trillion club in as little as three years (that’d entail a share price just shy of $420 per share). To accomplish the feat, Alex Karp’s empire will need to gain 125% from current levels. That’s certainly realistic for the next three years, especially since it feels like Palantir is still being “underestimated” by Wall Street, at least according to Ives.

I think there’s a pretty high chance that PLTR shares finish the year at Ives’ $200 target. And it may not take much good news, either. Sometimes momentum just builds on itself, as investors await the next big contract win. At this juncture, it’s AIP adoption that could continue acting as an upside surprise for future quarters.

While AIP’s adoption has already been impressive, I believe there’s still room for growth, as Palantir offers a more accessible onramp for prospective customers. Whether we’re talking about AIP bootcamps or features for faster deployment, Palantir seems to be doing a stellar job of expanding commercially.

Can Palantir keep putting up incredible quarters?

Palantir faced some pretty sky-high estimates going into its latest quarterly earnings. Still, the firm managed to blow away the numbers, as it posted a 48% sales surge and $1 billion in quarterly revenue. To top off the big beat, the firm raised its full-year guidance, signaling it’s going full speed ahead as the AI revolution continues playing out.

Indeed, the valuation has always been “stretched,” but after another big bump, shares have only gotten that much more expensive. Personally, I’m staying on the sidelines, even though Ives’ $200 target has a fairly high chance, at least in my humble opinion, of becoming a reality in as little as a few months.

Until analysts hike their price targets in the coming days and weeks, most analyst price targets imply a double-digit percentage loss from current levels. Until the broad market rolls over or Palantir experiences its next big valuation reset, I’ll not be chasing one of the market’s hottest stocks as it approaches a new slate of milestones.