After Palantir announced another impressive quarter and shared an optimistic forecast, analysts were quick to express their approval. Several even adjusted their price targets upwards, with Morgan Stanley reversing its previous sell stance and upgrading the stock. Palantir’s CEO, Alex Karp, highlighted the company’s use of artificial intelligence as a key driver for a remarkable 36% revenue growth in the fourth quarter. The firm’s earnings per share also surpassed analyst predictions. For the entire year, Palantir anticipates sales to range between $3.74 billion and $3.76 billion, surpassing the $3.52 billion average expected by analysts polled by LSEG. This positive news sent shares soaring over 18% in premarket trading after the quarterly report was released.
Despite the impressive numbers, some analysts remain cautious about the company’s future, with several maintaining hold and underperform ratings. Here’s a rundown of their insights:
Bank of America boosted its price target from $90 to $125, which suggests a potential gain of over 43% from the previous close. The firm also reaffirmed its buy rating. Analyst Mariana Perez Mora commented, "PLTR’s approach to operationalizing data, building high-fidelity digital enterprise twins, and speeding up decision-making is a formula for success." She believes that Palantir stands out as a value adder in the AI space.
UBS increased its price target from $80 to $105, reflecting more than a 25% potential upside. Yet, analyst Karl Keirstead held on to his neutral rating. He pointed out that, with Palantir’s project DeepSeek, they’ve shown that model costs are decreasing rapidly and performance disparities are closing. Keirstead believes Palantir’s pricing model might shield them from any potential AI price drops.
Morgan Stanley upgraded Palantir to an equal weight from underweight, setting a new price target of $95, up from $60. This suggests more than a 13% upside. Analyst Sanjit Singh acknowledged, "Considering the robust outlook, we admit our earlier concerns about slowing growth below 30% were off the mark due to tougher comparisons expected in 2025. Now, valuation remains the main issue."
Jefferies raised its price target from $28 to $60, yet this still implies about a 28% downturn. Analyst Brent Thill kept an underperform rating, noting, "While fundamentals are strong and U.S. momentum is increasing, guidance implies a 31% growth for CY25 compared to 29% in CY24. Palantir would need to boost growth to 50% for four years and maintain an 18x CY28E revenue multiple just to sustain its stock price."
These varied perspectives illuminate the mixed sentiment surrounding Palantir, even in light of its strong recent performance.
