Palantir jumps 14% on Nvidia partnership and analyst upgrade

Palantir Technologies Inc. shares rose 14% this past week after the company expanded its partnership with Nvidia Corp. to bring open-source AI models to U.S. government agencies, and received a bullish analyst upgrade that highlighted the resilience of its multi-model platform.

"The partnership could provide a boost to Palantir's already fast-growing government division," Gil Luria, an analyst at D.A. Davidson, said in a note upgrading the stock from neutral to buy with a $175 price target. Luria argued that companies building on Palantir's platform, which offers access to models from nearly all major AI providers, face less risk than those relying on a single vendor.

Palantir's government segment generated $687 million in revenue in the first quarter, up 84% from a year earlier. The expanded collaboration with Nvidia combines Palantir's sovereign AI operating system with Nvidia's Nemotron open models and accelerated computing infrastructure, allowing government agencies to cut costs and preserve data security while customizing AI deployments.

The upgrade comes as Palantir trades 38% below its all-time high, reflecting investor uncertainty about valuation and competitive pressure in the AI software market. Luria pointed to Anthropic's recent confrontation with the Trump administration, which forced the company to temporarily disable model access, as evidence that single-vendor dependency creates "catastrophic" business risk. Palantir's platform architecture, which can switch between OpenAI, Anthropic, and other providers, would have experienced minimal downtime in that scenario, he said.

Why Multi-Model Platforms Matter

The partnership underscores a structural shift in how government and enterprise customers approach AI procurement. Rather than committing to a single large language model, agencies are seeking middleware layers that aggregate multiple models and route queries based on cost, security classification, and performance requirements. Palantir's AIP platform, already deployed across U.S. defense and intelligence agencies, positions the company to capture this aggregation layer.

Nvidia's Nemotron open models, combined with its H100 and Blackwell GPU infrastructure, give Palantir's government clients access to frontier-level AI without sending sensitive data to commercial API endpoints. The arrangement mirrors a broader trend in enterprise AI: companies such as Amazon Web Services and Microsoft Corp. are also building multi-model platforms, but Palantir's existing government security clearances and contracts create a moat that cloud providers have struggled to replicate.

Valuation and the Path Forward

Palantir shares trade at elevated multiples relative to traditional software peers, reflecting the market's bet that government AI spending will accelerate. The company's government revenue growth of 84% in Q1 outpaces most defense tech peers, but sustaining that pace requires continued contract wins beyond the current Nvidia partnership.

Luria's $175 target implies roughly 30% upside from current levels, though the stock remains well below its 52-week high. The key question for investors is whether Palantir can convert its government foothold into commercial enterprise adoption at scale — a challenge that has eluded the company since its 2020 direct listing.

This article is for informational purposes only and does not constitute investment advice.