Palantir Technologies (NYSE:PLTR) has been gaining significant traction through its AI offerings and Palantir stock has followed suit.

The company’s data analytics suites like Apollo, Foundry, and Gotham continue to see strong uptake from Palantir’s clientele. Notably, just this month, the company also launched its Artificial Intelligence Platform which is backed with strong support via several government contracts.

Palantir stock surged 167% last year and another 24% in 2024. Now, many investors are wondering where the stock is headed next, after selling off from its recent peak.

A rising big data leader, Palantir has shifted focus toward its AIP, leading to robust growth. Boot camps have helped convert leads into clients, with the company reporting 103 deals over $1 million in Q4.

AI integration and a commercial client surge boosted revenue by 70% in Q4. Impressively, Palantir’s Q1 revenue target is $612 — $616 million, with plenty of attention expected to be paid to the company’s upcoming earnings results on May 6. 

With solid government revenue, Palantir has become a relative safe-having AI investment for growth investors seeking meaningful upside from here.

However, some bears point to Palantir’s valuation of 22-times sales as likely unsustainable, unless growth absolutely skyrockets in the years to come.

Here’s what to make of Palantir stock, and whether this stock has what it takes to ride the next AI wave higher.

A Closer Look at Palantir Stock

A recent deal with Oracle (NYSE:ORCL) includes moving Palantir’s Foundry software platform to Oracle Cloud Infrastructure. Additionally, Palantir will deploy Gotham and AIP on Oracle’s cloud.

Oracle, with only 2% market share in his space, aims to boost its cloud infrastructure and compete with major players.

Palantir has seen success with immersive “Bootcamp” events to promote its AIP software. These events helped identify AI use cases and contributed to robust customer growth.

The partnership with Oracle could open new avenues for customer lead generation and advance Palantir’s AI initiatives.

While the Oracle-Palantir partnership shows promise, significant gains may take time. Investing based solely on this deal isn’t wise. Examining each company’s fundamentals is prudent.

Oracle’s fiscal Q3 2024 revealed $80 billion in remaining performance obligations, indicating high demand for cloud products. 

With Palantir’s multiple valuation and price-sales ratio higher than other high-growth SaaS firms, and Oracle’s price-earnings ratio closer to the S&P 500, these companies make a strong duo.

‘Boot Camps’ Approach Is Working

Palantir has avoided traditional software sales methods for years, opting for unconventional approaches. The data mining company, cofounded by Peter Thiel, recently held software boot camps to attract new customers.

These camps included presentations, software demos, and even racetrack rides for attendees.

Palantir has intensified its focus on events to promote its AIP. The company held over 500 boot camps last year and plans for five daily globally this year.

CEO Alex Karp compared the demand to a rock concert, limiting attendance like backstage access. 

Despite overflowing demand, analysts suggest Palantir may need to bolster growth support given the complexity of its software. We’ll have to see if this results in increased capital expenditures, and how margins hold up in this regard.

Strong Future

Palantir converts big data into actionable insights for its clientele through subscription-based software solutions, ensuring steady revenue.

With a significant government contract base, funded in part by the CIA’s venture capital arm, it maintains a unique position in the market.

This position has been boosted by recent cloud partnerships and AI integrations many investors continue to remain bullish on.

I think if we do see another AI wave hit the market, Palantir will be a clear beneficiary. Accordingly, I’m remaining cautiously optimistic about PLTR stock, for the time being.

Over time, valuation matters, and Palantir has plenty of work to do to grow into its existing valuation. But if AI really is the next catalyst that could drive market-changing growth, perhaps this is the place to be. Time will tell.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.