TLDR
- Palantir earned Buy ratings from two leading analysts on February 3, 2026, with targets up to $205
- Q4 revenue surged 70% year-over-year to $1.407 billion, exceeding all estimates
- Free cash flow projections jumped from $4 billion to nearly $6 billion for 2027
- Operating margins expanded to 56.8% as profitability accelerated faster than revenue
- U.S. commercial segment revenue rocketed 137% higher in the fourth quarter
Palantir Technologies received a double dose of good news on February 3, 2026. Two prominent Wall Street analysts upgraded the stock to Buy following strong quarterly results.
Palantir Technologies Inc., PLTR
Baird’s William Power set a $200 price target. HSBC’s Stephen Bersey went higher at $205. Both see the company as a major beneficiary of AI adoption.
The upgrades followed Palantir’s Q4 2025 earnings report. Revenue reached $1.407 billion, marking 70% growth versus the prior year period.
Analysts had expected less. HSBC’s estimate stood at $1.342 billion. Consensus forecasts called for $1.340 billion. Palantir exceeded both.
The company posted non-GAAP operating profit of $798 million. That’s 114% higher than Q4 2024. Operating margins hit 56.8%, an 11.7 percentage point expansion year-over-year.
Earnings per share came in at $0.25 on a non-GAAP basis. That beat estimates by $0.02 and represented 84.9% growth.
AI Platform Drives Customer Demand
Power from Baird called Palantir “one of the clearest AI winners” in the market. He highlighted ten straight quarters of accelerating revenue growth.
The analyst sees the company’s platform as an AI-powered operating system. It connects data with applications for government and commercial clients across Western institutions.
Power raised his 2027 free cash flow forecast from $4 billion to nearly $6 billion. He outlined a bull case scenario reaching $7-8 billion. The analyst noted that free cash flow is “exploding” as the business scales.
Bersey from HSBC emphasized the beat on profitability metrics. The company’s 2026 guidance for non-GAAP operating profit came in at $4.134 billion. That’s well above the pre-results consensus of $3.127 billion.
HSBC now projects 2026 revenue of $7.527 billion, representing 68.2% year-over-year growth. The firm expects non-GAAP operating profit to reach $4.483 billion for the year.
Commercial Business Accelerates
The U.S. commercial segment delivered the strongest performance. Revenue hit $507 million in Q4, up 137% from the same period last year.
HSBC forecasts this division will grow at a 58.8% compound annual rate through 2029. The commercial business is attracting enterprises looking to implement AI solutions.
Total contract value for new deals reached $1.344 billion in the fourth quarter. That’s up from $1.310 billion in Q3 2025. The increase points to growing demand and a healthy sales pipeline.
Power believes the recent stock pullback has made valuation more attractive based on free cash flow metrics. He sees a long runway for customer expansion and strong remaining performance obligations.
Bersey flagged some potential risks worth watching. Government revenue could slow if global conflicts ease. Some industry observers also question whether enterprise AI projects will deliver expected returns.
The stock has gained 52.1% over the past 12 months. Shares fell 9.3% over the past month but rose 0.3% over the past week. The last closing price stood at $157.88.
Wall Street’s consensus rating sits at Moderate Buy. The average 12-month price target is $190.40, implying upside from current levels.
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