Palantir Stock Investors Just Got Great News From a Wall Street Analyst (Hint: The Stock Could Soar)

Palantir Technologies (NASDAQ:PLTR) has been one of the biggest winners of the artificial intelligence (AI) boom, in both share price appreciation and business expansion. The stock has added 2,400% since ChatGPT popularized generative AI in January 2023, and revenue growth has accelerated in 13 consecutive quarters.

Palantir investors recently got great news. In late October, JPMorgan Chase analyst Brian Essex initiated coverage of the company, awarding Palantir a buy rating and a target price of $262 per share. That is one of the most bullish forecasts on Wall Street and it implies 63% upside from the current share price of $160.

Here's what investors need to know.

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Palantir is a recognized leader in artificial intelligence platforms

Palantir develops analytics platforms that help government and commercial customers integrate and make sense of complex data. The company supplements its core analytics products with an integrated artificial intelligence (AI) platform called AIP, which serves as a large language model orchestration tool that lets clients swap models without rewriting applications, while retaining control over their sensitive data.

Brian Essex at JPMorgan Chase argues that Palantir has a durable economic moat in its ontology-based software. An ontology unifies data from disparate systems into critical workflows, helping clients make better decisions and automate business processes. For example, Palantir can help manufacturers navigate supplier delays by identifying which customer orders are at risk and deciding how to reallocate inventory.

Forrester Research recently recognized Palantir as a leader in AI platforms. In terms of current capabilities, the analysts ranked its platform above products from all competitors except C3.ai, but the report distinguished Palantir as having the stronger growth strategy. "Palantir's strategy is to build and offer a platform that can accommodate the world's most difficult and highest-return AI use cases."

Palantir's revenue growth has now accelerated in 13 straight quarters

JPMorgan Chase analyst Brian Essex justified his target price in a recent note. "As we move from a year where enterprises are just figuring out how to deploy the most transformational technology we have seen in our lifetime to one where they are looking for return, Palantir is already delivering ROI by leveraging its platform to fundamentally transform the business operations of its customers, and growth is acceleratingcustomers, and growth is accelerating."

Indeed, Palantir has consistently delivered impressive financial results. In the third quarter, revenue increased 96% to $2.3 billion, marking the 13th straight acceleration. That strong top-line growth was driven largely by momentum in the U.S. commercial business, where sales increased 119%. Meanwhile, non-GAAP earnings soared 144% to $0.44 per diluted share.

In his shareholder letter, CEO Alex Karp wrote, "We have now essentially doubled our entire business since the same quarter last year." And he expects that strength to persist for the foreseeable future. Palantir raised its full-year guidance, with sales now forecast to climb 156% to $8.5 billion in 2026, a significant acceleration from the 75% sales growth reported in 2025.

JPMorgan's Brian Essex is not concerned by Palantir's expensive valuation

For many investors, Palantir's rich valuation punches a hole in the investment thesis. Yes, the company has emerged as the standard in enterprise AI, and its business is growing at a phenomenal pace. But the current valuation of 53 times sales makes it the most expensive stock in the S&P 500, with Moderna ranking second at 47 times sales.

Is the business growing quickly enough to justify that valuation multiple? Brian Essex at JPMorgan says the answer is yes. "Valuation is reasonable when taking into account the company's uniquely profitable hyper-growth fundamentals, with potential for substantial disruptive upside within its primary market segments," he wrote in a note to clients.

Many Wall Street analysts agree with Essex and think the stock is undervalued at its current price. In fact, among 38 analysts who follow the company, Palantir has a median target price of $235 per share. That implies 46% upside from the current share price of $160.

JPMorgan Chase is an advertising partner of Motley Fool Money. Trevor Jennewine has positions in Palantir Technologies. The Motley Fool has positions in and recommends JPMorgan Chase, Moderna, and Palantir Technologies. The Motley Fool recommends C3.ai. The Motley Fool has a disclosure policy.