Palantir Technologies (PLTR 1.38%) stock has been in crushing form on the market in the past year with gains of 182%, and artificial intelligence (AI) has played a critical role in powering this red-hot rally.

For instance, in February this year, Palantir stock shot up impressively after posting its fourth-quarter 2023 results. Wall Street appreciated the company's beat-and-raise quarter, which was driven by the growing adoption of its Artificial Intelligence Platform (AIP) by commercial customers. And now, Palantir seems to have taken another solid step to monetize the growing demand for AI software platforms by partnering with cloud computing giant Oracle (ORCL -0.61%).

Let's take a closer look at this development and check how this move could be beneficial for Palantir investors in the long run.

Oracle's cloud footprint could accelerate the adoption of Palantir's AI software platform

Palantir and Oracle have partnered "to provide secure cloud and AI solutions aiming to power businesses and governments around the world." More specifically, Palantir's enterprise-focused data analytics platform, known as Foundry, the government-focused platform Gotham, and the increasingly popular AIP (which allows commercial customers to deploy large language models and other AI applications) will now be available through Oracle's cloud infrastructure.

It is worth noting that Palantir's AIP has been in solid demand of late. The company has been conducting bootcamps so that potential customers can understand how the integration of AI could improve their operations. This strategy has paid dividends. Palantir witnessed a 70% year-over-year increase in U.S. commercial revenue in the fourth quarter of 2023, driven by a 55% increase in the customer count.

Meanwhile, its overall commercial revenue increased 32% during the quarter, with the customer count jumping 44% year over year. Palantir ended the quarter with 103 deals worth at least $1 million. That was a big jump from the year-ago period when it closed 55 deals worth $1 million or more. A partnership with Oracle could increase Palantir's deal activity as the former's AI-focused cloud offerings are now in solid demand.

Oracle pointed out in its fiscal 2024 third-quarter earnings release that it expects to "continue receiving large contracts reserving cloud infrastructure capacity because the demand for our Gen2 AI infrastructure substantially exceeds supply." This robust AI-related demand drove the company's remaining performance obligations up by 29% in the previous quarter to a record $80 billion, suggesting that the proliferation of AI is helping Oracle build a solid revenue pipeline.

It is also worth noting that the 25% year-over-year growth in Oracle's cloud business last quarter was faster than the likes of Amazon Web Services and Alphabet's Google Cloud. The good part is that Oracle is looking to expand its data center capacity and has outlined a capital expenditure budget of $10 billion to bring online more capacity.

The improved reach of Oracle's cloud infrastructure should ideally be a tailwind for Palantir. Investors should note that Oracle already has a solid footprint as its public cloud is available in 48 regions across 24 countries. The company also has separate regions for the European Union and the U.S., the U.K., and Australian governments.

In all, this partnership could turn out to be a win-win for Palantir, considering that the adoption of AI in the cloud is set to grow rapidly in the future. More specifically, the cloud AI market is predicted to clock an annual growth rate of almost 36% through 2032. As such, it won't be surprising to see Palantir's AI offerings gain more traction going forward.

Faster growth could be in the cards for Palantir

We have already seen how AI is powering the growth of Palantir's commercial business. Now, the wider availability of its AI solutions could help accelerate the company's revenue and earnings growth.

Palantir finished 2023 with a 17% increase in revenue to $2.23 billion. Analysts are forecasting a 22% increase in its revenue this year to $2.71 billion. However, with the Oracle partnership now in place, the possibility of Palantir growing at a faster pace than analysts' expectations cannot be ruled out. If that happens, the market could reward this AI stock with more upside, which is why investors should consider buying more of Palantir before it heads higher following solid gains of 34% already in 2024.