Prediction: This Will Be Palantir’s Stock Price in a Year (Hint: It Implies Upside)

Palantir Technologies (NASDAQ:PLTR) delivered triple-digit gains in three straight years. However, the stock has traded sideways in 2026 despite strong financial results, primarily because investors are divided over its extremely rich valuation.

Former fund manager Michael Burry has been betting against Palantir since Fall 2025 and earlier this year wrote, "I believe the fundamental value of this company is well under $50 per share." He owns put options with a $50 strike price that expire in June 2027, meaning they would be in the money if Palantir stock falls below that level within that time frame.

Meanwhile, many Wall Street analysts think Palantir is undervalued, but none so much as Mariana Perez Mora at Bank of America. Her target price of $255 per share implies 43% upside from the current share of $178. Perez Mora argues that Palantir is still in the early stages of monetizing artificial intelligence.

The truth likely lies somewhere between the two extremes proposed by Burry and Perez Mora. I think Palantir will trade at $210 per share in a year. Here is my logic.

Image source: Getty Images.

Palantir's unique software has made it the enterprise standard in artificial intelligence (AI)

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 (LLMs). In other words, AIP is an agnostic tool that lets customers deploy and swap AI models without rewriting code or disrupting workflows.

Palantir's products are particularly powerful because they are designed around a decision-making framework called an ontology. Most analytics tools help users make sense of data with dashboards and reports, but actions must be taken in separate applications. Palantir's ontology creates a digital twin that not only surfaces insights, but also enables users to 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," according to Mark Giarelli at Morningstar.

Palantir's financial results have been nothing short of exceptional in recent years

Palantir's business is expanding at an impressive pace. In the second quarter, revenue increased 93% to $1.9 billion, the 12th straight acceleration, and non-GAAP net income increased 215% to $0.41 per diluted share. Palantir also reported a phenomenal Rule of 40 score of 155%. And CEO Alex Karp expects similar results over the next 18 months.

Morgan Stanley analyst Sanjit Singh says Palantir is emerging as the enterprise standard in AI, calling the company the best margin and growth story in software. "It's hard to find a better fundamental story in software than Palantir." However, he also cautions that the company will need to grow into its valuation.

Palantir trades at a rich valuation, but the stock could still reach $205 per share in the next year

Wall Street estimates Palantir's adjusted earnings will grow at 56% annually through 2027, but analysts have consistently underestimated the company. Palantir beat the consensus earnings estimate by an average of 14% over the last six quarters. Even if that continues, the current valuation of nearly 150 times adjusted earnings looks very expensive.

Investors can also consider valuation from another perspective. Palantir currently trades at 70 times sales, which makes it the most expensive stock in the S&P 500 by a wide margin. CrowdStrike is second at 45 times sales. That means Palantir could lose a third of its value and still be the most expensive stock in the index. That premium is unsustainable.

With that in mind, Wall Street estimates revenue will total $10.1 billion over the next four quarters. Assuming a more reasonable valuation of 50 times sales, the company would have a market value of about $505 billion if it meets the consensus estimate. That implies 18% upside from its current market value of $426 billion, which, in turn, implies a stock price of roughly $210 per share.

As a caveat, while I think that outcome is highly plausible, 50 times sales is still a very expensive multiple. If Palantir’s financial momentum stalls, the market may give the company a much lower valuation, in which case the stock could drop sharply in the next year.

Bank of America is an advertising partner of Motley Fool Money. Trevor Jennewine has positions in CrowdStrike and Palantir Technologies. The Motley Fool has positions in and recommends CrowdStrike and Palantir Technologies. The Motley Fool has a disclosure policy.