TLDR
- Citi upgraded Palantir (PLTR) stock to Buy with $235 price target, up from $210
- Stock gained 135% in 2025 versus S&P 500’s 16% return during same period
- Analyst expects 51% government revenue growth in fiscal 2026, 800 basis points above consensus
- Enterprise AI adoption and global defense spending driving optimistic outlook
- Forward P/E ratio of 177.61 considered justified by growth acceleration
Citi Research upgraded Palantir stock to Buy from Neutral on Monday. Analyst Tyler Radke raised his price target to $235 from $210.
Palantir Technologies Inc., PLTR
Shares climbed 0.7% in premarket trading. The stock had already surged 135% in 2025, crushing the S&P 500’s 16% gain.
Radke believes Palantir has “broken” traditional valuation frameworks. The stock trades at a forward P/E ratio of 177.61 compared to the S&P 500’s 22.49.
But the analyst sees more upside ahead. He raised revenue estimates by over 10% since mid-year.
Recent conversations with chief information officers suggest AI budgets are accelerating. Enterprise AI use cases are expanding rapidly.
Government Revenue Growth Projections
Radke’s government revenue forecast stands at 51% year-over-year growth for fiscal 2026. That’s roughly 800 basis points above consensus estimates.
He sees potential for 70% or higher growth. A defense supercycle is building momentum. International allies are modernizing military systems.
The analyst will watch Golden Dome and other defense initiatives. These programs could serve as catalysts throughout 2026. The financial impact would likely be larger in 2027.
AI and Defense Tailwinds
Palantir’s data ontology positions the company well for enterprise AI adoption. AI agents are gaining traction in commercial sectors. Defense spending is increasing globally.
The company’s government contracts could benefit from rising budget allocations. U.S. allies are prioritizing defense modernization.
Commercial momentum is building as AI projects move from pilots to production. That transition brings larger contract values and longer commitments.
Radke described recent performance as featuring “vicious growth acceleration and equally impressive margin expansion.” Revenue growth has been strong while profit margins widened.
The $235 price target implies roughly 31% upside from Friday’s close at $178.94. Citi’s upgrade represents a shift in thinking about PLTR stock valuation.
Traditional metrics suggested overvaluation. But Radke argues the growth profile justifies premium pricing.
Defense modernization urgency is spreading. Budget allocations are increasing across allied nations.
The company’s platform has become central to AI deployment strategies. The ontology layer helps organizations structure data more effectively.
Enterprise AI implementations are accelerating. Organizations are moving beyond pilot phases into full-scale deployments.
Citi’s revenue estimates now sit 10% higher than mid-2025 projections. That’s a material increase over a short timeframe.
The analyst expects government growth to accelerate from current levels. The 51% fiscal 2026 estimate would represent meaningful acceleration.
Citi upgraded Palantir stock to Buy with $235 target on AI adoption and defense spending outlook.
