3 Predictions for Palantir in 2026

Palantir Technologies (NASDAQ: PLTR) has had a rough start to 2026, despite having been one of the hottest stocks in the market over the past three years. The reason for the turbulence? It's been caught up in the software-as-a-service (SaaS) sell-off this year.

Let's look at three predictions for the stock this year.

1. Growth will remain hot

Palantir has been one of the best growth stories in the market. It has seen its revenue growth accelerate for 10 straight quarters, going from 13% in the second quarter of 2023 to 70% last quarter (Q4 2025). The growth has been driven by its artificial intelligence (AI) platform, AIP, which has essentially become an AI operating system that can help harness the power of large language models (LLMs) to make AI more applicable to helping solve real-world business problems.

One of the secrets to Palantir's success has been its bootcamp go-to-market strategy, where it helps build prototype solutions for organizations to solve issues using their own data in about five days. This has greatly reduced its sales cycle and led to strong new customer growth. Meanwhile, once it's gotten a foothold with customers, they have been quickly expanding their orders, as evidenced by its strong net revenue retention numbers, which checked in at a robust 139% in Q4.

Given the breadth of solutions across industries for which AIP is being used, combined with its contract backlog and short sales cycles, Palantir looks poised to continue generating robust revenue growth this year.

2. The stock will underperform this year

Despite Palantir's likely rapid growth this year, I think the stock will underperform in 2026. It's already down about 25% year to date, as of this writing, as it has been caught in the SaaS sell-off.

Despite the pullback, though, the stock is still not cheap. It currently trades at a forward price-to-sales (P/S) ratio of around 44.5 times 2026 analyst estimates and a forward price-to-earnings (P/E) multiple of more than 100 times. That leaves little room for error, and even the hint of revenue growth slowing or the company only slightly beating high expectations could send the stock tumbling.

Image source: Getty Images.

3. A further sell-off will be a buying opportunity

Given the current sentiment in software stocks and Palantir's high valuation, I think it's quite possible that the stock could come under more pressure this year. And quite simply, after three straight years of triple-digit gains, the stock could use a breather. Even the stocks of the largest companies in the world today have seen large drawdowns along the way, so it wouldn't be surprising to see Palantir's stock dip further.

That said, I think the stock can eventually grow to become one of the largest and most powerful AI companies in the world, and I think starting to accumulate shares at prices below $110 could be a smart long-term move.

Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.