Bank of America analysts remain bullish on Palantir (NYSE:PLTR), reiterating a Buy rating and a $28 price target on the stock in a recent note.
They believe the company is poised for "significant upside" driven by the accelerating adoption of Artificial Intelligence (AI).
Bank of America identifies several factors that will propel Palantir's growth. They expect significant growth in defense sector AI integration, a trend that will directly benefit Palantir.
Additionally, the company's commercial business is gaining momentum through bootcamps and other channels, demonstrating the value of its AI solutions. Finally, potential inclusion in the S&P 500 index could attract more institutional investors, further boosting the stock price.
Bank of America's technical analysis also supports their bullish outlook. They point to a "bullish correction" that has positioned the stock for a move towards $30.
In addition, rising moving averages and Palantir's relative strength to the S&P 500 are seen as supportive factors. The analysts believe PLTR has the potential to surpass recent highs and reach the 61.8% retracement level of its previous decline, near $30.
The options market also presents an attractive opportunity, according to Bank of America. They argue that options prices underestimate the potential volatility surrounding the upcoming Q2 earnings announcement. This creates an opportunity for investors to gain leveraged upside exposure through call spreads.