Key Takeaways
- Dan Ives from Wedbush named Palantir his leading software choice beyond the Magnificent Seven, praising its Q4 performance as “stunning”
- According to Ives, the AI transformation is merely in its “third inning,” with federal government deals potentially scaling to trillions of dollars
- Approximately $20M in revenue was reclassified from commercial to government accounts, creating misleading commercial performance metrics that Ives called insignificant
- Despite falling over 17% year-to-date in 2026, PLTR trades beneath its five-year historical averages across multiple valuation measures, though its forward P/E remains at 132x
- Analyst consensus stands at “Moderate Buy” with an average target price of $195.04, suggesting approximately 32% potential gains from present levels
During a recent CNBC appearance, Wedbush analyst Dan Ives made his position crystal clear. He positioned Palantir as his preferred software investment outside the elite Magnificent Seven group and emphasized that the artificial intelligence sector maintains substantial growth potential.
Palantir Technologies Inc., PLTR
Utilizing a baseball metaphor — describing the market as being in the “third inning” — Ives challenged widespread concerns about an AI bubble forming. His perspective: the artificial intelligence boom is gaining momentum rather than approaching exhaustion.
Shares of PLTR have declined more than 17% during 2026. Nevertheless, Ives characterized the firm’s latest quarterly performance as “stunning” and positioned Palantir in “a whole other category” relative to competing software companies.
The equity has retreated from elevated valuations and currently trades beneath its five-year historical averages across several metrics. However, a forward price-to-earnings ratio of 132x still represents a significant premium.
For Q4 of fiscal 2025, Palantir posted revenue of $1.41 billion — representing 70% year-over-year expansion. Domestic revenue reached $1.08 billion, climbing 93% compared to the prior-year quarter.
Full-year 2025 revenue totaled $4.475 billion, reflecting 56% annual growth. GAAP earnings per share for the fourth quarter stood at $0.24, while full-year GAAP EPS reached $0.63.
Understanding the Commercial Revenue Shortfall
A criticism leveled at Palantir’s recent quarter involved commercial revenue trailing analyst projections. Ives addressed this concern directly — approximately $20 million transferred from commercial to government classification due to a single contract reclassification.
He positioned this as an accounting adjustment rather than an indicator of underlying business weakness. Government-focused AI demand, according to his analysis, represents the narrative investors should prioritize.
Ives labeled U.S. federal AI expenditures “the golden goose.” He projected contracts could reach hundreds of billions in value, with extended-horizon potential climbing into the trillions.
“For many of these software enterprises, government-related business could double within the next two to three years,” Ives stated during his CNBC interview.
Cybersecurity Opportunities and Agentic AI Expansion
Ives additionally highlighted cybersecurity as a major beneficiary of AI infrastructure buildout. He projected security budgets could increase 50% as agentic AI creates more sophisticated vulnerability landscapes.
He characterized this as “the most connected trade” he had witnessed — indicating the AI infrastructure expansion and corresponding security investments are fundamentally intertwined.
Regarding regulatory concerns, Ives expressed doubt that government oversight would materially decelerate industry progress. He argued technological advancement was outpacing any regulatory structure’s ability to respond.
Palantir’s forward projections indicated Q1 2026 revenue between $1.532 billion and $1.536 billion. Full-year 2026 revenue expectations range from $7.182 billion to $7.198 billion.
U.S. commercial revenue independently is forecast to exceed $3.144 billion for the complete year.
Rosenblatt Securities maintained a Buy recommendation on PLTR with a $200 price objective on April 24. Mizuho preserved its Outperform stance but reduced its target from $195 down to $185.
Across 28 analysts, the consensus rating is “Moderate Buy” with an average price target of $195.04 — approximately 32% above current market prices.
