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Dan Ives is a prominent tech analyst, arguably the most popular one out there. He's bullish on the opportunities in artificial intelligence (AI), and one stock that he continues to see lots of potential in is Palantir Technologies (NASDAQ:PLTR).
Palantir has been delivering impressive results in recent quarters, and its growth has been tremendous. The stock's high valuation has spooked investors, and that was likely a key reason why it was down for much of the year. But since it reported its recent earnings results, it has been surging yet again. And Ives believes that the stock may still rise higher. Here's why.
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In a recent post on social media platform X, Ives said that, "investors [are] underestimating the scale and scope of this $4 trillion dollar spending wave." Ives believes that in the coming years, there is still going to be tremendous spending on AI. Due to these opportunities, Palantir was one of the stocks that were his top tech picks for 2027.
Palantir has been a big benefactor of AI-fueled growth, as the company's been winning over customers with its focus on AI sovereignty and the ability for customers to retain control of their underlying data. This is crucial for companies to maintain their competitive advantages and protect intellectual property.
The tech company has been an advocate for that, and it's been a hugely successful strategy. In its most recent quarter, which went up until the end of June, Palantir reported massive 93% revenue growth, which has been accelerating.
In just the past month, Palantir's stock has risen by more than 20%, taking it back to the highs it reached nearly a year ago. The bullishness has seemingly returned, and with Ives taking a favorable view of Palantir for next year, the tech stock may continue to rise higher in the near term.
But while there is plenty of excitement and optimism around Palantir, investors shouldn't overlook its valuation, as it trades at a whopping 180 times its trailing earnings. The business is doing exceptionally well, and its growth rate looks incredible. However, at such a hefty valuation, it could still limit the stock's gains. Plus, it may leave investors vulnerable to a sell-off if market conditions deteriorate, as stocks that are highly valued may have the most room to fall.
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David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.
Dan Ives Remains Bullish on Palantir's Stock in 2027 for This Simple Reason was originally published by The Motley Fool
