Palantir executives welcomed the advent of low-cost artificial intelligence. Other software stocks could also see benefits from cheaper AI.

Bank of America analysts raised their price target on the stock after earnings, citing Palantir's edge in a crowded market. Shares were up 27% on Tuesday.

The AI-focused Palantir joins a group of less than 50 public American companies worth at least $200 billion, quite the turn of events for the government contractor worth less than $20 billion two years ago.

Palantir continues to reap the rewards of its decades of AI expertise. The stock is expensive, so investors should exercise care. In the fourth quarter, Palantir generated revenue that accelerated to 36% year over year (and 14% sequentially) to $828 million.

In the 17 reporting periods since it became public, Palantir has beaten the analyst consensus for sales in all but one quarter.