US stocks have been in a sharp uptrend ever since President Trump announced a 90-day truce with China that significantly trims reciprocal tariffs the two nations had imposed on each other’s items.
The rally has even pushed a handful of the American tech stocks into the ‘overbought’ territory. Still, experts at the Bank of America Securities believe some of them could rip even higher from here.
These include Palantir Technologies and Cadence Design Systems. Let’s take a closer look at what these two have in store for investors in 2025.
Palantir Technologies Inc (NASDAQ: PLTR)
Palantir stock is significantly more expensive compared to even the AI darling, Nvidia, at writing.
Still, Bank of America analysts led by Mariana Perez Mora are convinced that PLTR is not really done pleasing its shareholders yet.
In its latest research note, the investment firm raised the price target on Palantir shares to $150, which indicates potential for another 15% upside from current levels.
BofA remains positive on the AI stock despite a close to 75% rally over the past month, primarily because the big data analytics firm has a differentiated offering for investors.
“We see Palantir as the market definer for organisations leveraging artificial intelligence to drive accelerated tangible results,” she told clients in a report last week.
Mora particularly touted the accelerated speed as well as scale at which the Nasdaq-listed firm deploys products and onboards customers.
Her bullish note arrives shortly after Palantir reported a strong Q1 and raised its revenue guidance for the full year. That said, the company based out of Denver, Colorado remains unattractive for income investors given it does not currently pay a dividend.
Cadence Design Systems Inc (NASDAQ: CDNS)
Cadence Design Systems is also expensive on forward price-to-earnings basis than NVDA at the time of writing.
Still, analysts at the Bank of America Securities recommend owning it at current levels as it’s a “high quality compounder with resilient complexity leverage.”
More importantly, CDNS is relatively more insulated than its tech peers from tariff-related risks. “We like Cadence’s leading position in an EDA (Electronic Design Automation) industry that’s levered to the same secular trends as semis but with much more muted cyclicality,” they added in their latest research note.
BofA likes Cadence shares for the strength of the company’s financials as well. Earlier in May, the multinational based out of San Jose, California reported a strong first quarter and raised its outlook for the full year.
“CDNS has defensiveness/scarcity value and is a unique beneficiary of rising chip complexity,” the investment firm told clients in its recent report.
Much like PLTR, however, the semiconductor stock is not a suitable pick for income investors either, as it does not currently pay a dividend yield.
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