According to CNBC, Truist Securities analyst Arvind Ramnani initiated coverage of Palantir with a Buy rating and a price target of $223, implying 28% upside from current levels. This comes after the stock soared 135% in 2025. Ramnani called Palantir a “best-in-class AI asset,” arguing its premium valuation is justified by its strong financial profile and unique market position. He highlighted the company’s AIP platform for capturing generative AI implementation and noted it has generated positive GAAP earnings per share for 12 consecutive quarters. The analyst also pointed to accelerating U.S. business and international AI adoption as long-term drivers, while a free cash flow margin over 40% could support increased capital returns.
The AI Platform Play
Here’s the thing about Palantir’s current hype: it’s not just about selling AI tools. It’s about being the operating system for an organization’s data and AI workflows. Ramnani’s thesis hinges on that “unique market position.” Basically, Palantir spent years building platforms (Gotham, Foundry) that governments and massive corporations use to connect their messy, proprietary data to operations. Now, with AIP, they’re slapping a generative AI interface on top of that entrenched system.
And that’s a powerful spot to be in. It’s one thing to offer a chatbot API; it’s another to offer an AI that understands a military’s logistics data or a pharmaceutical company’s clinical trial results. The switching costs for customers are enormous. So when Ramnani talks about Palantir being “ideally positioned” for AI adoption, he’s betting that their existing, sticky contracts are the perfect Trojan horse for upselling generative AI capabilities. The race for insights is on, and Palantir is selling the track.
The Valuation vs. Profitability Tightrope
But let’s address the elephant in the room. A 135% rally in one year? A price target that still sees nearly 30% more upside? That’s a premium valuation by any measure. Truist acknowledges this, but their buy case rests on two financial pillars finally coming together: growth and sustained profitability.
For years, critics hammered Palantir for its high stock-based compensation and questionable path to GAAP profitability. Now, the company is touting 12 straight quarters of positive GAAP EPS. That’s a big deal for investor psychology. It shifts the narrative from “burning cash for growth” to “profitable growth engine.” Combine that with a 40%+ FCF margin, and you have a story about a company that can theoretically fund its own expansion AND return capital to shareholders. It’s a narrative designed to comfort investors who might otherwise balk at the price tag. The question is, can they keep this up if the AI spending cycle slows?
Look, analyst initiations like this are often a lagging indicator of a trend. The huge 2025 move already happened. But Truist’s call is less about discovering Palantir and more about validating its new identity as a profitable AI software company, not just a government contractor. It’s a bet that the last year wasn’t just hype, but the start of a new, more financially disciplined chapter. Whether that bet is right, well, that’s the multi-billion dollar question.
