Goldman Sachs endorses Palantir amid AI software demand shift

By Mackenzie Tatananni Palantir Technologies has long been dogged by concerns over its rich valuation, but Wall Street's view is shifting in its favor amid surging demand for custom, localized artificial-intelligence software. Goldman Sachs analyst Gabriela Borges became the latest to endorse the stock on Thursday as she raised her rating on the shares to Buy from Neutral with a $230 price target. The target implies shares could rise 18% from Wednesday's closing price of $194.12. Palantir advanced 2.5% to $198.97 in premarket trading on Thursday. As Borges sees it, Palantir's total addressable market is poised to grow. That expansion hinges partly on the rise of sovereign AI, as governments and enterprises alike strive to keep data under strict local control rather than exporting it to public cloud giants. Market demand is also shifting toward bespoke AI applications, or highly customized software workflows designed to replace generic, off-the-shelf chatbot wrappers. Enterprise customers are seeking, and likely willing to pay a premium for, solutions that directly enhance processes like supply chain operations, logistics, and internal decision-making. Additionally, Borges believes companies are "in the early stages of applying AI to their proprietary data" in order to get a leg up on rivals. In the software sector, the analyst cited CrowdStrike's launch of SafeMind, its purpose-built agentic AI cybersecurity system, and Datadog's application of adaptive machine learning to time-series forecasting. While software companies are "generally sophisticated enough" to scale such projects with their own or acquired engineering talent, "we expect industries with lower tech talent density to be an opportunity for Palantir," Borges added. Much of Palantir's success stems from its forward deployed engineering model, where engineers work directly alongside customers to tailor Palantir's software to an organization's needs. That strategy "requires tight feedback loops between field and product," Borges wrote, which she believes Palantir "has perfected" to the point of being able to automate the process using AI engineers. Goldman isn't alone in its bullish call. Of 29 analysts tracked by FactSet, 20 rate the stock a Buy or Overweight. Seven have a Hold rating, and only two recommend a Sell. Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal. (END) Dow Jones Newswires October 08, 2026 08:45 ET (12:45 GMT) Copyright (c) 2026 Dow Jones & Company, Inc. The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead