Palantir Technologies Inc. (NASDAQ: PLTR) shares rose after DA Davidson upgraded the stock to Buy from Neutral and raised its price target to $175 from $165. The upgrade reflects increased confidence in the software company's market position, driven by its growing competitive moat in the AI era and what the firm describes as the most attractive valuation the stock has seen in some time.

DA Davidson analyst Gil Luria raised the 2026 EPS estimate to $1.50 from $1.40 and the 2027 EPS estimate to $2.14 from $1.78, both above consensus. Luria cited recent U.S. government restrictions on Anthropic’s AI models as a validation of Palantir’s orchestration layer thesis. Companies that built directly on frontier AI models faced disruption, whereas Palantir customers simply had the underlying model swapped out. The firm noted that Palantir now trades in line with high-growth software peers like Snowflake and Datadog while growing at twice the rate of any of them.

Rating and Target Changes

The following table summarizes the revised ratings and price targets:

Valuation and Growth

Luria stated that Palantir has grown into its valuation as profits have soared, and the multiple has contracted. The analyst described the current setup as a "gift" for investors. The firm highlighted that the stock's valuation is now aligned with high-growth software peers, despite its superior growth rate.

Market Context

The market momentum follows Palantir’s expanded partnership with NVIDIA Corp. (NASDAQ: NVDA) to build custom AI models for U.S. government agencies. Additionally, Palantir published an AI sovereignty manifesto emphasizing data retention and controlling weights as essential for preserving enterprise value. At the time of publication, Palantir shares were trading 5.19% higher at $132.26.

David Sacks, a venture capitalist and former White House crypto czar, stated that Palantir Technologies Inc. CEO Alex Karp was "exactly right" to warn enterprises against handing proprietary data to frontier AI labs. Speaking on the All-In Podcast, Sacks argued that the real meaning of AI safety for enterprises is control over their compute, models, data stack, and proprietary knowledge, or "alpha." He warned that frontier labs risk absorbing clients' know-how and eventually turning it into competing products, leaving companies exposed if they do not own their AI infrastructure outright.

Figma Cited as Warning Sign

To illustrate his point, Sacks pointed to Figma as a cautionary example. He alleged that Anthropic "blindsided" the company by launching the competing tool Claude Design after an Anthropic executive had served on Figma's board. Sacks noted that Figma shares have fallen roughly 50% this year while Anthropic's valuation has surged, highlighting the potential dangers of partnering with model providers that may later become rivals.

Sacks Warns of AI Duopoly Risk

Sacks argued that Anthropic and OpenAI have effectively formed a "duopoly" in the AI model layer. He warned that Anthropic's push for stricter safety regulations could strengthen that dominance rather than limit it, leaving enterprises with fewer competitive alternatives. This perspective aligns with Karp's recent critique that the AI industry's competitive moat is shifting away from foundation model makers toward a software layer that lets enterprises switch models without sacrificing control of their intellectual property.

Palantir Bets on the AI Application Layer

Palantir is positioning itself as the orchestration layer that manages whichever model an enterprise chooses. The company recently launched a platform designed to help U.S. government agencies securely deploy and customize Nvidia Corp's open-source Nemotron models. Karp revealed that some U.S. government customers had recently switched from proprietary AI models developed by companies such as Anthropic to Nvidia's open-source alternatives. Its Evolve platform already routes workloads across multiple AI models based on customer priorities such as performance, cost, or security.

Trading Metrics, Technical Analysis

Shares of Palantir rose 7.77% to close at $125.73 on Wednesday. The stock edged up another 0.71% to $126.62 in Thursday’s premarket trading. Futurum Equities analysts recently echoed the assessment of Sacks and Karp, calling proprietary data protection the "oxygen" behind enterprise AI and warning that feeding corporate data into public models risks giving away a company’s competitive edge.