Analysts race to overhaul Palantir stock price targets after Q4 earnings

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Palantir Technologies shares soared in early Tuesday trading, with the stock set to open at a fresh all-time high, following a stronger-than-expected earnings and outlook update from the AI and defense-focused data analytics group.

Palantir (PLTR) blasted Street earnings forecasts late Monday, with revenues rising 36% from the prior-year period to $827.5 million, thanks in part to a surge in demand for its AI-related products in its commercial business.

The Denver, Co.-based group, founded by the tech investors Peter Thiel and Joe Lonsdale, uses its artificial intelligence platform, known as AIP, to help clients pull together disparate collections of data into a single model that they then can use to build, train and deploy in their day-to-day processes.

Palantir is also seeing benefits from its ontology offering, a framework that helps represent and connect real-world entities, data, and processes for its commercial clients.

Palantir forecast 2025 revenues in the region of $3.75 billion, firmly ahead of the LSEG estimate, with commercial revenues likely rising 54% from last year to $1.08 billion.

For the three months ending in March, Palantir said it sees revenues rising to around $860 million and adjusted operating income of around $356 million.

Embracing the AI revolution

"America continues to rapidly embrace the AI revolution, and we saw this unrelenting demand drive impressive outperformance in our U.S. business," finance chief Dave Glazer told investors on a conference call late Monday. "Our U.S. commercial business is seeing unprecedented demand with AIP driving both new customer conversions and existing customer expansions in the U.S."

The impressive fourth quarter earnings, which included a bottom-line beat of 14 cents per share and a gross profit margin of 82.9%, triggered a host of price target changes from analysts on Wall Street, even as the stock continues to trade at a rich valuation compared to its peers on the software and AI sectors.

"The winning continues," said D.A. Davidson analyst Gil Luria, who lifted his price target by $58 to $105 per share following last night's update.

"Palantir reported an outstanding quarter with revenue growth accelerating further due to relentless US demand for AI solutions," he added. "Palantir remains well positioned to benefit from helping customers effectively utilize LLMs through its ontology."

Morgan Stanley analyst Sanjit Singh, who added $35 to his Palantir price target, taking it to $95 per share, said the group has a "powerful AI story that is resonating in the market at this early stage of the Gen AI cycle".

"Despite an ultra premium valuation, we see lack of downside catalysts over the next three to four quarters," Singh and his team wrote. "Given the strength of the outlook, we acknowledge that we were wrong about our core fundamental catalyst of slowing growth below the 30% level due to the tougher compares in 2025."

Palantir could see DOGE benefit

Raymond James analyst Brian Gesuale reiterated his 'market perform' rating on the stock, and noted the the group's solid first quarter revenue forecast suggests "strong exit velocity" from 2024 and "persistent AIP momentum and demand across virtually all markets" heading into the new year.

"We are taking our model above the guide given encouraging checks, the potential to benefit from DOGE and recent momentum," he added. "While we remain enthusiastic about Palantir’s longer-term positioning in AI, and see some value as a 'safe haven' in the current environment, we are maintaining our 'market perform' rating given our view that shares need to consolidate stellar gains over the last couple of years and grow into its rich valuation."

RBC Captital's Rishi Jaluria was also concerned with the stock's valuation, and the likely influence from retail investors in the stocks' after-hours gain, but nonetheless lifted his price target by $29, to $40 per share.

"Overall, both Government and Commercial results were better than expectations, but our concerns about the runway for growth and product differentiation remain," said Jaluria, who kept his 'underperform' rating in place.

"While 2025 numbers move higher on guidance well ahead of consensus, we question conservatism [and] continue see the risk-reward skewing unfavorable with shares trading at a premium multiple," he added.

Palantir's 'long bet'

"We continue to view Palantir as a leader in AI, and with its notion of quantified exceptionalism as well as our positive checks corroborating said quantifiable improvements," said Cantor Fitzgerald analyst Thomas Blakey.

"We believe Palantir is early in its journey of transforming industries and governments with its enterprise software and services offering," added Blakely, who lifted his price target on Palantir stock by $26, taking it to $98 per share.

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"We have taken a long bet over decades around the assumption that if we built the products that our partners, most importantly, our partners in the West, most importantly, our partners in the U.S. ought to build ... we would end up as a massive significant, and much more importantly, impactful company," said CEO Alex Karp.

"We are at the way beginning of revolution and we plan to be a cornerstone, if not the cornerstone company, and driving this revolution in the U.S. over the next three to five year," he added.

Palantir shares were last marked 22.1% higher in premarket trading to indicate an opening bell price of $102.35, an all-time high that would extend the stock's six-month gain to around 320%.

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