TLDR
- PhillipCapital and Citi analysts set buy ratings with $208-$235 price targets on Palantir stock
- Analysts predict 70-80% total revenue growth in 2026 driven by AI platform and defense contracts
- Third quarter U.S. commercial revenue rocketed 121% as AIP gains enterprise market share
- Stock’s forward P/E fell to 170x from 309x peak, creating potential entry point
- Management raised full-year guidance to $4.4 billion revenue, up 53% year-over-year
Palantir Technologies fell 17% in the last quarter. Now analysts are stepping in with bullish calls.
Palantir Technologies Inc., PLTR
Tyler Radke at Citi bumped his price target to $235. That represents 42% potential upside from Tuesday’s closing price.
The analyst argues Palantir operates outside normal software company rules. The business is posting exceptional growth while expanding margins.
Radke highlights increasing defense budgets globally. Government IT systems need updates and Palantir stands to benefit.
He projects the government division will grow 51% in 2026. Overall revenue could expand 70-80% this year.
The Artificial Intelligence Platform is winning deals across sectors. Companies and agencies are deploying the technology at scale.
AI Platform Fuels Commercial Expansion
Third quarter revenue climbed 63% year-over-year. The headline number only tells part of the story.
U.S. commercial revenue jumped 121% compared to the same period last year. Growth accelerated 29% from the previous quarter.
This segment now makes up 34% of Palantir’s total business. Two years ago it was a fraction of that size.
AIP is the catalyst behind the expansion. Enterprise customers are finding use cases that deliver real value.
Even government clients are adopting the platform now. They watched commercial deployments succeed and wanted the same capabilities.
Palantir’s remaining performance obligations reached $2.6 billion. That’s 65% higher than last year.
These represent signed contracts that haven’t converted to revenue yet. The backlog provides visibility into future quarters.
Leadership increased their full-year outlook. Revenue should hit $4.4 billion, growing 53% from last year.
The U.S. commercial segment alone is expected to reach $1.43 billion. That would be 104% growth for the full year.
Valuation Multiple Compresses
Paul Chew at PhillipCapital initiated coverage with a buy rating. His $208 target suggests 32% upside from current levels.
Chew uses a unique valuation framework. He compares Palantir to itself over time rather than other software stocks.
The forward price-to-earnings ratio hit 309x back in October. It’s dropped to 170x now.
That’s below the one-year average of 190x. The broader AI selloff pushed the multiple lower.
Chew points out Palantir has captured just 2.4% of its addressable market. The opportunity was $119 billion in 2020.
AI software is growing over 25% annually. The total market has likely expanded since that initial calculation.
He forecasts $4.2 billion in revenue for 2025. That works out to 47% year-over-year growth.
Net income should nearly double as the company scales. Commercial is now growing faster than government business.
The segments are projected to increase 51% and 43% respectively. Both divisions are performing well.
Palantir expanded into 90 industry sectors by 2024. The company served only 60 sectors in 2021.
Each new vertical opens additional revenue opportunities. The broader reach strengthens the growth outlook.
Palantir scored 114% on the Rule of 40 metric in Q3. This combines growth rate with profit margin.
Anything above 40% is considered excellent. Palantir is nearly three times that benchmark.
Wall Street remains split on the stock. The consensus rating is neutral with six buys, ten holds, and two sells.
The average target price across all analysts is $189.94. Both Radke and Chew sit well above consensus.
The stock has surged 2,190% over three years. The journey included at least ten separate drops of 20% or more.
