Palantir Technologies stock has risen 1,880% since ChatGPT's late 2022 launch, though it has fallen 17% from its peak amid valuation worries and a shift away from software stocks. Analysts' price forecasts range from $50 to $255 per share, implying 70% downside at the bearish extreme and 50% upside at the bullish extreme. The median target is $200, suggesting 17% upside.
Bulls argue the company provides essential AI and analytics tools for data-driven decisions in commercial and government sectors. Forrester Research recently ranked Palantir as a leader in AI decisioning platforms, and International Data Corp. recognized its leadership in AI-driven source-to-pay platforms.
CFRA Research's Janice Quek noted Palantir's third-quarter revenue grew 62% to $1.1 billion, marking the ninth consecutive acceleration. Quek said Palantir achieved a Rule of 40 score of 114%, calling it "unprecedented for a software company."
Wedbush Securities' Dan Ives selected Palantir as a top pick for 2026, describing its software as the gold standard in AI use cases. In a client note, Ives wrote, "With the company making strategic moves to remain at the forefront of AI, we believe that PLTR has a golden path to become a trillion-dollar market cap company and will grow into its valuation."
Bank of America's Mariana Perez Mora stated in a recent note, "We continue to see PLTR unmatched in their ability to rapidly achieve in-production solutions and provide human-machine teams with the ability to make the most informed decisions." This aligns with commentary from Palantir executive Ryan Taylor, who said, "Our unique capability lies in moving from prototype to production."
Morgan Stanley's Sanjit Singh praised Palantir's latest financial results and its positioning as the enterprise AI standard. He wrote, "Palantir is not only delivering the best growth in public company software but also the best profitability in all of software. It is hard to find a better fundamental story in software."
Bears focus on valuation, noting the stock trades at 105 times sales, 10 times the software industry average and three times the next most expensive S&P 500 stock. Among the 100 largest U.S. software stocks, only seven others ever reached a price-to-sales ratio above 100, and they all dropped at least 67% after their valuations peaked.
Morningstar's Mark Giarelli said in November that Palantir's price-to-sales ratio represented a 350% premium to other AI companies. He expressed concern about the poor risk-reward profile, stating the company's revenue would need to grow 45% annually for five years to justify buying the stock today.
RBC Capital's Rishi Jaluria, consistently the most bearish analyst on Palantir, believes the addressable market is limited to large, complex companies due to its focus on bespoke solutions requiring heavy consultation. Jaluria thinks commercial revenue will grow 15% annually long-term, down from 73% in the third quarter, making the current valuation unsustainable.
Fund manager Michael Burry, known for predicting the 2008 housing collapse, disclosed a sizable bet against Palantir in the third quarter, with two-thirds of his $1.4 billion portfolio in Palantir put options. He argues the company's software is not unique and the stock is too expensive.