1 Wall Street Analyst Believes Palantir Will More Than Double in a Year. Is She Right?

Palantir (NASDAQ: PLTR) stock has been a dud so far in 2026. As of Wednesday's close, it was down around 30% year to date, and off about 8% over the past 12 months. That's particularly disappointing after the impressive returns it gave investors from 2023 to 2025. However, there are still plenty of calls for Palantir stock to deliver jaw-dropping returns over the next year.

Currently, the stock trades for about $126 per share, but Bank of America (NYSE: BAC) analyst Mariana Perez Mora has a price target of $255 per share on the stock. That's a one-year price target, and Palantir obviously would have a long climb to make before it could hit that mark. But if Bank of America and Mora are right, the stock is about to more than double in the next year.

Image source: Getty Images.

Palantir's valuation leads to a different conclusion

Palantir got its start as an AI-powered data analytics company. Originally, its software was designed strictly for use by government agencies and militaries. The company's expansion into catering to commercial clients came relatively recently. While government contracts are still the core of its business, Palantir has evolved to become a generative AI company that helps businesses interweave AI solutions into their operations.

This has led to monster growth for Palantir, and Q1's revenue growth spiked to 85% year over year. But that may have been its peak. The consensus view among Wall Street analysts is that Palantir's growth rate will decline to 80% next quarter and land at 72% for 2026 overall. For 2027, they expect 45% revenue growth. While these are still strong growth rates, they're nothing compared to what Palantir is putting up now.

That's a problem because Palantir still has a ton of optimism about future growth priced into the stock.

Because it is a profitable business, the best tool for measuring Palantir's value is the forward price-to-earnings (P/E) ratio. This accounts for the 2026 growth projections. Many big tech stocks trade in the range of 20 to 30 times forward earnings. However, Palantir is far more expensive.

PLTR PE Ratio (Forward) data by YCharts.

Palantir tips the scales at 85 times forward earnings. So, for the stock to trade for a far more reasonable 30 times forward earnings, it would need to grow its earnings by about 180% beyond what growth is expected in 2026. That tells me that several years' worth of potential growth are already baked into its stock price. As a result, I think it's more likely that Palantir's stock price will continue its decline as investors' expectations realign with reality.

I don't foresee any future where this stock hits Bank of America's 12-month price target of $255. It's just one more illustration of why investors need to take their own deep looks at stocks rather than blindly trusting Wall Street analysts' price projections.

Bank of America is an advertising partner of Motley Fool Money. Keithen Drury 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.