Palantir Technologies' stock price has more than doubled each year over the past three years. In 2023, it returned over 167%, followed by a 340% gain in 2024 and a 135% advance in 2025, consistently outperforming the S&P 500.
Citigroup analyst Tyler Radke recently upgraded the stock to a buy rating with a $235 price target, expecting momentum to continue into 2026. He stated that discussions with chief information officers indicate Palantir's commercial revenue will accelerate as budgets and use cases expand, while government revenue may rise due to U.S. modernization priorities. Radke believes this will lead the company to exceed revenue and earnings estimates, with upward revisions likely.
The stock's performance is linked to accelerating revenue growth, which has improved quarterly since Q2 2023, from 13% year-over-year growth in 2023 to 63% last quarter. Success has been driven by U.S. commercial customers, particularly after the introduction of the Artificial Intelligence Platform (AIP). Palantir, initially a government defense contractor with its Gotham platform, expanded into the commercial sector with Foundry, but growth surged when paired with AIP as an orchestration layer.
Foundry AIP gathers data from various sources, organizing it into an ontology linked to real-world objects or processes, reducing AI hallucinations by providing a single source of truth. Customers can use large language models for actionable insights without such concerns.
As an AI orchestration layer, Foundry AIP has gained traction in the U.S. commercial market. Last quarter, U.S. commercial revenue surged 121% to $397 million, with growth from new and existing customers. The Bootcamp sales model, which helps organizations build AI-driven tools in five days, has shortened sales cycles and attracted new customers, reflected in a 45% increase in customer count last quarter. Existing customers expanded rapidly, with U.S. commercial total contract value up 342% and net revenue retention at 134% in Q3.
U.S. government revenue jumped 52% to $486 million last quarter, driven by modernization efforts under the Trump administration. International government revenue rose 66% to $147 million.
The stock trades at a forward price-to-sales multiple of 49 times and a forward price-to-earnings ratio of 126 times, making it expensive. Growth acceleration could justify these multiples, but some investors may wait for a pullback before buying, noting that large companies like Nvidia, Alphabet, and Apple have experienced significant drawdowns historically.
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