Is Palantir Technologies Stock Going to $38? 1 Wall Street Analyst Thinks So.

Palantir Technologies (NYSE: PLTR) has been among the early beneficiaries of the growing appeal of artificial intelligence (AI). The company's data mining and AI solutions have been adopted by U.S. government and enterprise customers alike. Its recent results lit a fire under the stock, and investors were clearly impressed.

One Wall Street analyst believes this is just the beginning.

Reaccelerating AI-fueled growth

Wedbush analyst Dan Ives boosted his price target to $38 on Palantir stock while maintaining an outperform (buy) rating on the shares. For those keeping score at home, that represents a potential upside for investors of 57%, compared to Monday's closing price.

The analyst cited "strong beats" in Palantir's second-quarter results. He went on to point out that deals worth $10 million or more jumped 50% year over year, while U.S. commercial contracts nearly doubled.

The analyst is clearly on top of things. In the second quarter, Palantir's revenue of $678 million grew 27% year over year, resulting in adjusted earnings per share (EPS) of $0.09, which surged 80%. Sales were well ahead of expectations, while profits were also higher.

After decelerating in the first quarter, the U.S. commercial segment took off, with revenue surging 55% to $159 million, now accounting for 23% of Palantir's total income. What makes this all the more remarkable is the segment's customer count, which surged 83%, while its remaining deal value soared 103%.

Much of that outperformance was the result of strong demand for its Artificial Intelligence Platform (AIP), which CEO Alex Karp called "unprecedented." The company's bootcamps, which pair customers with Palantir engineers to develop AI solutions to business problems, have been the key to its success.

Management put an exclamation point on the robust results by raising its full-year guidance, the second increase in as many quarters. Palantir now expects revenue of $2.75 billion in 2024, up 23%.

Finally, Palantir stock boasts a forward price/earnings-to-growth (PEG) ratio of 0.24, when any multiple less than 1 suggests a stock is undervalued. That's why Palantir is a clear and unequivocal buy .

Danny Vena has positions in Palantir Technologies. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy .