Palantir stock jumps to biggest gain in over a year after AI rally

Palantir Technologies PLTR shares surged on Friday, marking the company’s strongest single-day gain in more than a year as renewed optimism around artificial intelligence helped fuel a broad rally across software stocks.

Palantir stock climbed more than 9% to around $156.54 during Friday trading, making the stock's biggest daily advance since April 2025.

The gains extended a two-session rally that has lifted the stock nearly 18%.

The move came as investors rotated back into software names following strong quarterly results from Snowflake, whose earnings report and AI-focused product updates helped reignite confidence across the sector.

Despite the recent rebound, Palantir shares remain under pressure for the year, down roughly 12% in 2026.

By comparison, the Nasdaq Composite has gained about 16% over the same period.

Snowflake earnings revive AI software optimism

The latest rally in software shares began after Snowflake reported quarterly earnings on Wednesday that exceeded expectations and included stronger guidance.

Investors particularly focused on Snowflake’s AI-related products, especially Cortex Code, known internally as “CoCo,” which management described as a major contributor to the earnings beat.

HSBC analyst Stephen Bersey upgraded Snowflake to Buy from Hold on Friday, calling CoCo the clearest sign yet of the company’s ability to monetize artificial intelligence products.

According to the company, the coding agent is now used across more than 7,100 accounts and has generated meaningful AI-related revenue.

Deutsche Bank analysts also raised their price target on Snowflake shares while maintaining a Buy rating.

“While we were cautiously optimistic heading into the print despite what appeared to be a more challenging setup for the remainder of the year, results and commentary point to an even more meaningful underlying inflection in customer consumption patterns,” the analysts wrote.

The broader AI narrative received another boost after Dell Technologies reported strong quarterly earnings late Thursday.

Dell has become an important supplier of AI infrastructure and recently partnered with Palantir to provide an on-premises AI operating system targeting healthcare, defense, and other industries.

Defense exposure adds another layer of support

Palantir also benefited from renewed investor interest in defense technology and drone-related applications.

Reuters reported that the Trump administration is considering direct funding support for US drone manufacturers through discussions involving the Pentagon and the Office of Strategic Capital.

Although Palantir was not directly named in the report, investors viewed the development positively because the company’s software platform is closely tied to military and drone applications.

Earlier this year, Palantir announced a partnership with Ondas and World View to develop an AI-enabled multi-domain intelligence platform designed for aerial and ground missions.

The combination of AI momentum and defense-related exposure has helped improve sentiment around the company after a difficult start to the year.

Software sector still faces questions

Despite the rally, investors remain cautious about the broader software sector as concerns persist over how artificial intelligence could disrupt traditional software-as-a-service business models.

Earlier in the year, many software stocks sold off sharply amid fears that AI-native platforms could replace existing enterprise software providers.

Palantir, despite being viewed as one of the biggest beneficiaries of the AI boom, was not immune to the pressure.

Research firm 22V Research said recent earnings reports suggest software “is still no longer an obvious short.”

However, the firm stopped short of turning fully bullish on the sector.

“Software has not yet proven it won’t be disrupted, so it’s not an obvious long either,” the firm wrote.

22V Research nevertheless included Palantir among software companies with strong earnings-per-share revisions and improving earnings sentiment.

The firm said the ranking reflects “an objective score of how optimistic management teams sounded during their earnings calls.”

For Palantir and the broader software sector, investors are now watching whether the latest AI-driven rebound marks the beginning of a more durable recovery or simply a temporary relief rally after months of weakness.