Virtus Investment Partners' Joe Terranova believes Palantir Technologies Inc (NYSE:PLTR) is one of the best ways to play the artificial intelligence (AI) boom right now.

What To Know: Tuesday on CNBC's "Fast Money Halftime Report," Terranova suggested that Palantir stock is undervalued and continues to fly under the radar despite hitting new 52-week highs this week.

"Palantir, I believe, is the biggest, the most underrated AI-exposed play in the market today. I own it personally," Terranova said.

Terranova also holds Palantir stock in his momentum fund. It's the seventh-largest holding in the Virtus U.S. Quality Momentum ETF (NYSE:JOET) with an approximate 1% weighting as of Tuesday. The fund aims to deliver exposure to U.S.-listed companies that combine strong quality fundamentals with positive technical trends.

The bullish commentary from Terranova on Tuesday comes after the momentum investor highlighted Palantir as an "AI halo" play last week.

Palantir has had significant exposure to government contracts for quite some time, but growth in the commercial side of the business is really starting to take off, he said, adding that AI is playing a big role in fueling that growth.

"You are seeing the growth in revenue attributable to [AI] beginning to build. It will further build in the upcoming quarters. Palantir has really been a strong momentum name in a software environment that's been somewhat experiencing friction," Terranova said on the show last week.

Terranova isn't alone. BofA Securities added Palantir to its top 10 best U.S. ideas list at the start of the month. The firm sees more room for Palantir shares to rally in the near term as the AI story begins to shift from hardware to software.

The upcoming earnings season is going to play a big role in the trajectory of the broader market as expectations will be high given the surge in tech stocks year-to-date.

Palantir is not due to report earnings until early August. Analysts are looking for the company to report earnings of 8 cents per share on revenue of $652.141 million, according to estimates from Benzinga Pro.

PLTR Price Action: Palantir shares are up approximately 60% year-to-date. The stock was down 0.14% at $27.66 at the time of publication, according to Benzinga Pro.

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