Here's Palantir's 'secret sauce,' which these analysts say can boost the stock even more

By Britney Nguyen

Bank of America notes the benefits of Palantir's forward deployed engineers, who embed within customers to help deploy the company's technology offerings

Palantir CEO Alex Karp recently announced a strategic partnership with the U.K.'s Ministry of Defence.

Palantir Technologies Inc. has a special team of software engineers helping the company attract more customers, and that's fueling growing interest on Wall Street.

Bank of America analysts see Palantir's (PLTR) forward deployed engineers, or FDEs, as part of the company's "secret sauce." These are engineers who embed with customers to provide services and encourage the use of Palantir's technology, the analysts noted. Now that Palantir is adding agentic artificial intelligence "to extend this idiosyncratic skillset to more use cases," Bank of America expects the AI FDEs to accelerate the company's commercial business.

The software stock is already up 137% so far this year, a performance that ranks third in the S&P 500 SPX. But with Palantir's business expanding "in every direction," the Bank of America team sees more upside ahead, with a fresh price target of $215 that reflects the expectation for "stronger growth across applications." The new target implies the potential for about 18% upside.

In its government business, Palantir's new strategic partnership with the U.K.'s Ministry of Defense, which aims to invest up to GBP750 million, or more than $1 billion, into AI-enabled defense technology over the next five years, "builds on Palantir's momentum as the global digital battle-management system," the analysts said.

See more: Palantir has 'main-character energy.' Here's how that can help its stock power higher.

According to Bank of America, Palantir's AI FDEs are "widening the moat" and will benefit the company by driving demand, scalability "and empowered engineers that can focus on the most complex problems." More customers will likely want to buy Palantir's operating system rather than build their own, the analysts said, because it will be faster at implementing AI agents. And they expect Palantir's engineers and customers to find new use cases for the AI FDEs through utilizing them.

With that, the analysts said they expect Palantir's commercial sales to exceed $10 billion by 2030. In August, Palantir reported that its U.S. commercial revenue rose 93% from the previous year to $306 million in the June quarter.

Read: Palantir's stock gains as 'bombastic' AI demand fuels an earnings milestone

Meanwhile, Palantir's deal with the U.K.'s Ministry of Defense, which marks its first outside of the U.S. worth $1 billion, not only builds on its growing exposure to the country, but also on international demand for its technology, the analysts said. They noted that adoption of Palantir's Maven Smart System in the U.S. has grown eightfold since early 2024 and that it is now being used by NATO.

"We expect other countries to increasingly consider Maven as their global digital battle-management system, as it provides both interoperability with the U.S. and allies as well as governance on their own data," the Bank of America team said.

The analysts raised their estimates for Palantir's government sales to exceed $8 billion by the end of the decade. Palantir's U.S. government revenue grew to $426 million in the June quarter, up 53% from the previous year.

Analysts at D.A. Davidson also highlighted the power of Palantir's FDEs as part of a discussion about the company's "main-character energy."

-Britney Nguyen

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09-23-25 2216ET