Prediction: This Will Be Palantir's Stock Price in a Year (Hint: It's Time to Buy)

Palantir Technologies (NASDAQ: PLTR) delivered triple-digit returns in 2023, 2024, and 2025, but the stock has been dragged lower by an indiscriminate sell-off in software names in 2026. Palantir is down 40% from its high as of July 28.

However, investors' fears that generative artificial intelligence tools will displace Palantir are unwarranted, and the stock's valuation -- once excruciatingly expensive -- now looks more tolerable. I predict Palantir will trade at $192.50 per share by mid-2027. That implies 55% upside from its current share price of $124.

Here's my logic.

Image source: Getty Images.

Palantir has secured a leadership position in AI platforms because of unique software architecture

Palantir develops data integration and analytics platforms for customers in the public and private sectors. The company also provides an adjunct artificial intelligence platform (AIP), which serves as an orchestration tool for large language models. Importantly, AIP is an agnostic tool that lets customers apply the models of their choosing to data.

Palantir's products are particularly powerful because they are designed around a decision-making framework called an ontology. Most analytics tools help users understand data with dashboards and reports, but actions must be taken in separate applications. Palantir's ontology goes further by creating a digital twin that not only surfaces insights, but also lets users take action and automate workflows within the platform.

"The core ontology function and value proposition is that Palantir not only organizes and displays data, but it also creates prioritized, ranked data that can be quickly understood and interacted with, ultimately automating real-world efficiency gains," explains Mark Giarelli at Morningstar.

Palantir has received praise from several independent research firms. Dresner Advisory Services has ranked the company as a leader in three market studies: (1) artificial intelligence, data science, and machine learning, (2) model operations, and (3) agentic AI. And Forrester Research has recognized Palantir as a leader in AI decisioning platforms.

Palantir's business momentum is impressive. In the first quarter, the company increased its customer count 31%, and average sales per existing customer rose 50%. In turn, revenue climbed 85% to $1.6 billion, the 11th straight acceleration, and non-GAAP net income rose 153% to $0.33 per diluted share. Palantir also achieved a phenomenal Rule of 40 score of 145%, which is unheard of in software.

Palantir stock has dropped 40% from its high, creating a buying opportunity for patient investors

Palantir has dropped 40% from its high partly because investors are worried that generative AI tools from Anthropic and OpenAI could displace its products. But agnostic platforms like Palantir will only become more important as LLMs proliferate. As an agnostic orchestration layer, Palantir lets clients swap and mix models without rewriting applications or disrupting enterprise workflows.

Wall Street estimates Palantir's TTM adjusted earnings will increase 67% to $1.59 per share over the next four quarters. That makes the current valuation of 130 times adjusted earnings look tolerable, especially when the company beat the consensus earnings estimate by an average of 16% over the last six quarters. For context, the stock traded around 370 times adjusted earnings at this time last year.

Looking ahead, I will assume Palantir's adjusted earnings reach $1.75 per share after the company reports financial results in Q1 2027; that is 10% higher than the Wall Street consensus. I will also assume the valuation drops to 110 times earnings. If both figures are correct, Palantir stock will trade at $192.50 per share by mid-2027, which implies 55% upside from its current share price of $124.

Wall Street is even more optimistic. Among 35 analysts, Palantir has a median target price of $200 per share, implying 61% upside from the current price.

Trevor Jennewine has positions in Palantir Technologies. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.