Palantir Technologies Inc. (PLTR) is riding an AI wave that keeps getting bigger, and Bank of America Securities thinks there's plenty of room left to surf.

Following recent meetings with the company, analyst Mariana Perez Mora reiterated her Buy rating and $255 price target, saying the discussions bolstered confidence in Palantir's growth prospects and momentum around enterprise-level AI adoption.

Commercial Business Leading the Charge

The standout performer continues to be Palantir's U.S. Commercial business, which Mora describes as having the strongest momentum. The business is "supported by strengthening backlog, lower contract duration, and customers rapidly climbing up the PLTR value chain," she noted.

In other words, companies aren't just signing up—they're expanding how they use the platform, which is exactly what you want to see if you're betting on sustained growth.

Government Contracts and Political Alignment

On the government side, Palantir recently landed a two-year order worth $448 million. Mora points out this aligns with "the Trump Administration's reindustrialization of America priorities," suggesting the political winds are blowing in Palantir's favor.

Of course, not everyone's thrilled. Critics argue that Palantir is "dangerous" and warn that its tools could enable unprecedented levels of surveillance, endangering basic freedoms. It's a tension that's been following the company since its founding.

The AI Infrastructure Play

Still, momentum continues building. Mora expects Palantir could expand margins thanks to "operating leverage growing with each use case across the businesses."

"As improvements in AI accelerate, enterprises are realizing that the infrastructure offered by Palantir is critical for them to incorporate these rapidly evolving capabilities," she wrote.

Translation: as AI gets better and more complex, companies need the kind of heavy-duty infrastructure Palantir provides to actually use it effectively.

Shares of Palantir Technologies were up 0.68% to $184.32 at the time of publication Tuesday.