Will Palantir maintain its AI-fueled business growth that sent its shares up 31% on Tuesday?

Palantir Technologies (PLTR) shares rose 31% Tuesday after the company reported fourth-quarter earnings that beat expectations, driven by growing commercial demand for its artificial intelligence platform (AIP).

Several analysts raised their price targets on Palantir shares, reflecting the company’s success in the fourth quarter and its growth potential in its AIP business segment, though some expressed concerns about whether Palantir will be able to maintain that momentum.

The company’s shares gained $5.14 on Tuesday to end at $21.86, after rising to $22.18 during the session. The stock has gained about 160% over the past year.

Bank of America analysts raised their price target for Palantir from $21 to $24, with the analysts writing that Palantir’s AIP “is still in its infancy and is already contributing in a meaningful way.”

They said the AIP growth seen in the fourth quarter “is a sign of Palantir’s unique positioning as an enabler of data-driven AI-powered decision-making in a tangible, accessible, and operational way.”

Wedbush also raised its price target from $25 to $30 to reflect “the extraordinary commercial success Palantir is experiencing with AIP right off the bat.”

Calling Palantir the “Messim of AI,” the Wedbush analysts said that “few times a decade do you see a tech company that is so far ahead of the competition and at a sweet spot for future growth… and yet this time the Street is dismissing it, dusting off its long-term bullish bear thesis.”

Palantir was listed alongside large-cap stocks Nvidia (NVDA) and Microsoft (MSFT) as a company they believe meets this criterion.

Some analysts, however, have expressed concerns about the sustainability of growth in AIP’s business segment and the company’s overall valuation.

Jefferies raised Palantir’s stock rating to “hold” and raised its price target to $22, citing that AIP “has been growing faster than we initially expected,” but the analysts noted that the company “has remained on the sidelines due to valuation concerns.”

“Our biggest concern is whether they can sustain momentum after a seasonally strong F4Q,” Jefferies analysts wrote, adding that “forward-looking indicators were consistently weak in the first three quarters (down >20%), and government revenues continued to decline.”