TLDR
- Baird and HSBC upgraded Palantir to Buy on February 3, 2026, with price targets reaching $205
- Fourth quarter revenue jumped 70% to $1.407 billion, crushing Wall Street estimates
- U.S. commercial business exploded 137% year-over-year to $507 million
- Operating margin expanded to 56.8% while free cash flow projections nearly doubled
- Wall Street consensus rating sits at Moderate Buy with average target of $190.40
Two top-tier analysts upgraded Palantir Technologies on February 3, 2026. The moves came after reviewing the company’s impressive fourth-quarter performance.
Palantir Technologies Inc., PLTR
William Power from Baird upgraded the stock to Buy with a $200 price target. Stephen Bersey from HSBC also moved to Buy, setting a $205 target. Both analysts highlighted Palantir’s position as an AI market leader.
The company reported Q4 2025 revenue of $1.407 billion. That’s a 70% jump from the same quarter last year. The results exceeded analyst expectations across the board.
HSBC had projected $1.342 billion in revenue. The consensus estimate stood at $1.340 billion. Palantir beat both figures handily.
Commercial Segment Posts Triple-Digit Growth
The U.S. commercial division stole the show. Revenue hit $507 million in Q4, representing 137% year-over-year growth.
HSBC expects this segment to maintain a 58.8% compound annual growth rate through 2029. The firm projects total 2026 revenue of $7.527 billion, up 68.2% from 2025.
Profitability metrics impressed analysts just as much as top-line growth. Non-GAAP operating profit reached $798 million, up 114% year-over-year.
The company posted a 56.8% non-GAAP operating margin. That’s an 11.7 percentage point expansion compared to last year. Non-GAAP earnings per share came in at $0.25, beating forecasts by $0.02.
Free Cash Flow Forecasts Surge
Baird’s Power dramatically increased his free cash flow projections. He raised his 2027 estimate from $4 billion to nearly $6 billion. He outlined a potential upside scenario reaching $7-8 billion.
Power called Palantir “one of the clearest AI winners” in the market. He noted the company has now posted ten consecutive quarters of accelerating revenue growth.
The analyst believes free cash flow is “exploding” as operations scale. He sees the recent stock pullback as creating a more attractive valuation entry point.
HSBC’s Bersey focused on the company’s 2026 guidance. Palantir provided non-GAAP operating profit guidance of $4.134 billion for the year. That’s well above the pre-results consensus of $3.127 billion.
HSBC now expects 2026 non-GAAP operating profit to reach $4.483 billion. Bersey emphasized Palantir’s AI platform as a key competitive advantage.
What’s Driving the Optimism
Both analysts view Palantir as uniquely positioned in the AI revolution. The company’s platform connects data with applications for government and commercial clients.
Total contract value for new agreements reached $1.344 billion in Q4 2025. That’s up from $1.310 billion in the prior quarter. The increase suggests accelerating demand for Palantir’s services.
Bersey noted some potential headwinds worth monitoring. Government revenue could face pressure if global conflicts ease. There are also questions about whether enterprise AI projects will deliver expected returns on investment.
Over the past year, Palantir stock has climbed 52.1%. The shares dipped 9.3% over the past month but gained 0.3% over the past week.
Wall Street maintains a Moderate Buy consensus rating. The average 12-month price target sits at $190.40 versus the last closing price of $157.88.
Power ranks 373 out of 11,984 analysts on TipRanks with a 56.49% success rate. Bersey ranks 549 out of 11,984 with a 73.08% success rate and 18.5% average return per rating.
