Analysts are divided over Palantir’s AI aspirations as a bull and bear present their arguments.

Palantir Technologies raised its annual revenue target on Monday as it sees an opportunity to commercialize AI, but not all analysts are convinced.

On Monday, CEO Alex Karp said Palantir’s aim is to make money from AI, instead of merely producing tools that write computer-generated poetry. Some companies have restricted their employees from using such tools like OpenAI’s ChatGPT.

“We will figure out how to monetize it,” Karp said, referring to Palantir’s artificial intelligence platform, or AIP. According to the company’s website, AIP will allow businesses as well as defense and military organizations to tap large language models and AI to aid in decision-making.

Dan Ives, managing director at Wedbush Securities, is bullish on Palantir’s AI ambitions. On Monday, the firm said “a star is born,” referring to AIP.

“That’s probably the best pure play AI name, in terms of them monetizing not just on the government side, but on the enterprise side when it comes to AI,” said Ives on CNBC’s “Street Signs Asia” on Tuesday. Palantir recently announced it was awarded a five-year contract worth up to $463 million from the U.S. Special Operations Command.

“And I think we saw this as an inflection point quarter, where this remains, in our opinion, one of the core AI names over the coming years,” said Ives.

In the note, Wedbush said “the company is engaging with 300+ enterprises to deploy AIP, all searching for an efficient and secure solution to adapt the latest LLMs for use on internal systems and proprietary data.”

“Based on the strong performance and the AI arms race well underway, we continue to believe Palantir is the gold standard in AI,” Wedbush said. The firm maintained their outperform rating and $25 price target, representing roughly 39% upside from the stock’s Monday close of $17.99.

Rishi Jaluria, managing director at RBC Capital Markets, disagreed and said Palantir is “worth substantially lower.” The firm has an underperform rating on the stock as well as a $5 price target, which implies downside of about 72% from Palantir’s Monday close.

“This is not truly a generative AI company. When we look at Palantir and based on our conversations with [industry observers and Palantir’s employees], this does not appear to be anything truly differentiated when it comes to generative AI,” Jaluria said on CNBC’s “Squawk Box Asia” on Tuesday.

“This really feels like the same Palantir services and technology that they’ve been selling, which has its value. They’re not actually adding a tremendous amount of value to be a leader in generative AI, even though they are positioning themselves as such in front of the investment community and even in front of CIOs and CEOs,” said Jaluria.

But there is still a “self-fulfilling prophecy risk” that Palantir can go out and talk to CEOs and CIOs and say they’re doing AI over and over again, said Jaluria.

“And that can convince the startup of new customers, new pilots, new business that actually hasn’t shown up in numbers yet. And that’s why we think it could be a dangerous short in the near term.”