Palantir Technologies, Inc. (NYSE:PLTR) shares are spiking higher in premarket trading on Friday after a Wedbush analyst initiated coverage of the stock with a bullish recommendation.

The Palantir Analyst: Daniel Ives initiated coverage of Palantir stock with an Outperform rating and $25 price target, suggesting roughly 55% upside from current levels.

The Palantir Thesis: "Palantir has built an AI fortress that is unmatched and poised to be a major player in this AI Revolution over the next decade," said Ives in the initiation note.

The analyst called the company as the "Messi of AI on the golden track to success," referring to the World Cup-winning Argentine soccer legend Lionel Messi, who currently plays in Major League Soccer For Inter Miami.

Palantir's secret sauce, according to the analyst, is focusing on human-driven analysis by leveraging artificial intelligence. The Alex Karp-led company builds intelligent platforms for data management and security that enable users to address intricate questions without the need for statistical or computational expertise, the analyst said.

"The company's mission of addressing critical problems faced by institutions across a variety of industries empowers data-driven decision-making in an environment where large data sets are exposed to significant privacy and civil liberties risks," he added.

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Given the company's extensive experience handling customer data, its transition to a pure-play AI name will leverage its existing expertise to drive advancements and deliver AI solutions powered by high-quality data, Ives said.

Palantir can capitalize on the expansion of new use cases over the next six-12 months, given its large partner ecosystem and extensive product capabilities, the analyst said.

He sees the company as an "early innings on a sum-of-the-parts AI story just on the cusp of monetizing this massive green field AI opportunity."

The analyst said Palantir's valuation is attractive at current levels with a favorable risk-reward. The stock can continue to re-rate and trade well above its software peer group over time as Palantir continues to expand and capitalize on this AI revolutionary period, he added.

Palantir Price Action: In premarket trading on Friday, Palantir shares rallied 4.46% to $16.87, according to Benzinga Pro data.

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