Overall, Palantir (PLTR) has had a solid start to 2025. Its growth numbers look impressive, and its AI platform is gaining traction across industries. Yet not everyone is convinced. Some investors still hesitate due to the stock’s high price, its history of sharp swings, insiders’ selling shares, and the Pentagon declaring Budget cuts that will impact Palantir’s bottom line, as more than half of its revenue stems from defense contracts.
Despite its steady rise – its stock is up 15% year-to-date – Palantir has yet to fully overcome analysts’ doubts about its ability to maintain this pace. Nevertheless, one analyst from William Blair thinks Palantir’s recent move to partner with its foe, Databricks, is a game-changer.
Palantir and Databricks Join Hands
Last week, the company made a move that could change the game. Palantir partnered with Databricks, another big name in AI-driven data analytics. The two companies have often been seen as rivals, but now they’re working together to make their platforms more compatible. This isn’t a full merger of their tools, and they won’t be selling a joint product. Instead, they’re making it easier for businesses to use both systems side by side.
Louie DiPalma, an analyst at William Blair, weighed in on the move, noting that while Palantir and Databricks compete in some areas, they rarely go head-to-head for contracts. The market, he said, is big enough for both. More importantly, the partnership makes sense for customers. “Since there are now many joint users, it makes sense for both of their data platforms to work nicely with each other,” he explained.
Beyond commercial clients, the partnership could also be key in the government sector. The U.S. government recently issued an order requiring agencies to adopt better tracking systems for payments. Palantir, with its reputation for handling high-security data, stands to benefit. Working with Databricks strengthens its position as a go-to choice for agencies needing powerful AI tools. For Palantir, this partnership could be a turning point. It expands its reach, enhances its platform, and makes it more competitive against tech giants like Microsoft (MSFT) and Google (GOOGL) (GOOG). However, the big question remains: will this be enough to finally convince skeptical investors that Palantir’s rise is just getting started?
Is PLTR a Buy, Hold, or a Sell?
Turning to Wall Street, Palantir is considered a Hold. The average price target for PLTR stock is $94.27, implying a 7.92% upside potential.
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