On October 29th, JPMorgan Chase covered the artificial intelligence software company Palantir for the first time, assigning it a 'Buy' rating and a target price of $262 per share by December 2027, and included it in the list of companies that analysts should pay close attention to.

Analyst Brian Essex believes that companies' focus on AI is shifting from how to deploy the technology to how to obtain actual investment returns. Palantir has already achieved this goal by helping customers transform their business operations, and its growth continues to accelerate.

JPMorgan Chase pointed out that Palantir saw revenue growth of 93% year-on-year in the first quarter, marking the 12th consecutive quarter of increasing growth. After adjustments, the operating profit margin reached 62%, and free cash flow increased by 126% year-on-year. The bank believes that Palantir boasts both rapid growth and strong profitability, and its current valuation is reasonable. Its target price of $262 is based on a forecast of $11.7 billion in free cash flow for 2028, as well as a enterprise value to free cash flow ratio of 55 times.

In addition, JPMorgan Chase has included Palantir on its list of potential positive catalyst events, expressing optimism about the quarterly financial report to be released on November 2nd. Although the bank's forecast for third-quarter performance is generally in line with market expectations, it believes there is still a significant possibility that the actual results will exceed these expectations.