Palantir Technologies(NASDAQ: PLTR ) Shares have risen 2,000% since January 2023, recording triple returns in each of the past three years. But the stock trended lower in 2026. It is currently trading 34% below its record high despite the company reporting strong financial results in early February.
However, Wall Street analysts who cover Palantir generally think the stock is oversold. In fact, the average target price per share of $196 implies a 43% upside from the current share price of $137. In addition, many analysts significantly increased their future earnings estimates last month, reflecting more confidence in the company.
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Here’s good news for Palantir partners.
Image source: Getty Images.
Palantir develops data integration and analytics software for commercial and government customers. It also creates a near artificial intelligence (AI) platform that allows developers to integrate large language modules into applications and workflows. Palantir’s platforms revolve around a decision-making framework called an ontology, which differentiates its products from most analytics platforms.
last year, Forrester Research Palantir is recognized as a leader in AI decision-making software, which automates and improves the decision-making process. Similarly, Global Data Corporation has ranked the company as a leader in AI-enabled sourcing software, which is used for decision-making related to procurement and supply chain management.
Mariana Perez Mora Bank of America Palantir recently set a target price of $255 per share, which represents an 86% upside from the current share price of $137. “We see PLTR as unmatched in their ability to achieve rapid production solutions and provide human-machine teams with the ability to make highly informed decisions,” she wrote.
Moving forward, Palantir has a strong flame behind it. Grand Vision Research estimates that the market for AI platforms will grow by 38% annually through 2033.
Palantir reported exceptional financial results in the fourth quarter. Revenue rose 70% to $1.4 billion, the 10th straight pace, and GAAP non-net income increased 79% to $0.25 per diluted share. The company achieved an unprecedented and exceptionally impressive score of 40% of 127%.
Following the report, Sanjit Singh Morgan Stanley Palantir set a target price of $205 per share, which represents a 50% upside from the current share price of $137. In a note to clients, Singh said the company is becoming the standard in enterprise AI as it delivers the best growth and profitability among public software companies. “It’s hard to find a better foundational story in software.”
Many Wall Street analysts raised their future earnings estimates when Palantir released its fourth-quarter report. The new consensus estimates are listed below, along with details on how consensus estimates have changed over the past month.
This is good news for shareholders. Stocks are often valued based on how quickly investors think earnings will increase in the future, so upward revisions to future earnings estimates can directly define share prices.
However, Palantir shareholders still have something to worry about. Including the revision above, Wall Street expects that to adjust to 56% annually through 2027. This 183 times the present value of adjusted earnings looks very expensive.
Here’s the big picture: The Palantir brand is synonymous with enterprise AI, and its financial results are nothing short of spectacular. But even the best company in the world is not worth buying at any price. Palantir trades at an unusually rich valuation, meaning its risk-reward profile is heavily skewed toward risk.
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Bank of America is an advertising partner of Motley Fool Money. Trevor Genovine holds positions at Palantir Technologies. The Motley Fool has and offers positions in Palantir Technologies. Motley Fool has a disclosure policy.
Palantir stock investors just got good news from Wall Street analysts was originally published by The Motley Fool
