Shares of Palantir Technologies (NYSE: PLTR) charged sharply higher this week, soaring as much as 47.5%, according to data supplied by S&P Global Market Intelligence. By the time the market closed on Friday, the stock was still up 43.2%.

The catalyst that initially sent the data analytics and artificial intelligence (AI) systems pioneer higher was the company's better-than-expected results. However, the stock got an additional boost as Wall Street scrambled to update its models, issuing a slew of new, higher price targets.

Blockbuster results

For the fourth quarter, Palantir delivered revenue of $608 million, up 20% year over year (and 9% sequentially). The results were driven by robust U.S. commercial revenue, which soared 70%.

The company also produced record net income, marking its fifth successive quarter of profits under generally accepted accounting principles (GAAP). This resulted in adjusted earnings per share (EPS) of $0.08.

Sales were well ahead of Wall Street's expectations, as analysts' consensus estimates were for revenue of $602.4 million and adjusted EPS of $0.08.

The company's guidance also added to the momentum. For the coming year, Palantir is guiding for revenue to climb 20% year over year to $2.66 billion at the midpoint of its guidance. Management expects continued strong growth from U.S. commercial revenue, with expectations of at least 40% growth, but the company has a habit of issuing conservative guidance, so the results could be even more bullish.

Wall Street piles on

Shortly after Palantir released its results, Wall Street analysts rushed to update their financial models, resulting in a cascade of price targets and two upgrades.

Wedbush analyst Dan Ives increased his price target to a Street-high $30, which implies upside of 23% -- above and beyond this week's stellar move. Ives seemed to capture the prevailing mood, citing the "off-the-charts commercial success" of Palantir's Artificial Intelligence Platform (AIP) and the "eye-popping" 70% growth of its U.S. commercial business. He called Palantir the "undiscovered gem" of AI.

Finally, the stock's valuation, when measured in terms of the company's forward price/earnings-to-growth (PEG) ratio, reveals a valuation of less than 1 -- the benchmark for an undervalued stock.

For those reasons and more, Palantir stock is a buy.

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