Jefferies analyst Brent Thill raised the firm's price target on Palantir (PLTR) to $40 from $30 and keeps a Buy rating on the shares.

Recent large deal announcements, as well as his survey data from "hundreds of IT users" who work at current Palantir customers, lead Thill to believe that "fundamentals are alive" at the company.

Though he thinks the 41% year-to-date move in the stock implies "significantly elevated expectations" heading into the Q4 report, Thill remains positive on the long-term growth opportunity. However, he also warns the stock may need to "digest a potentially conservative initial CY21 guide and the upcoming lock-up expiration before its next leg higher."