Palantir stock rose 11% after beating Q4 earnings and revenue estimates

Palantir shares jumped 11% in early Tuesday trading after the company posted stronger-than-expected Q4 earnings and delivered a 2026 forecast that blew past analyst targets.

The company earned 25 cents per share in the fourth quarter on $1.41 billion in revenue. Wall Street had only been looking for 23 cents per share and $1.33 billion in sales.

This was the tenth straight quarter where Palantir grew revenue faster than the one before. According to Goldman Sachs, the commercial side of the business grew 137% year over year, while the government division increased 66%.

The company’s software is used across both sectors to process large amounts of data, with many analysts pointing to Palantir’s role in artificial intelligence as the main reason clients keep signing big contracts.

2026 forecast beats Wall Street by a wide margin

Investors weren’t just reacting to the last three months. What really got their attention was Palantir’s 2026 revenue guidance, which now targets 61% growth, far above the 43% expected by analysts.

The company expects to reach $10 billion in revenue by then, with the U.S. commercial business alone projected to grow at least 115%, bringing in over $3.14 billion.

Wall Street firms rushed to update their outlooks. Morgan Stanley’s Sanjit Singh said the company was “on course to reach $10B in revenue at the fastest growth rate and highest margins perhaps in [software] history.” At the same time, Bank of America’s Mariana Perez Mora pointed to Palantir’s $448 million deal with the U.S. Navy in December, calling it “only the beginning.” She also mentioned the $10 billion contract with the U.S. Army signed in July as another major driver.

Despite this, analysts did flag one soft spot: growth in the number of new customers slowed. But UBS’s Karl Keirstead dismissed the concern, saying it’s “not a key KPI for Palantir.”

Wall Street split on valuation despite strong results

Even with the strong numbers, opinions were divided. Some analysts said Palantir’s high valuation could be a risk going forward. RBC Capital Markets slapped the stock with an “underperform” rating and a $50 price target, which suggests a potential 66% drop from its recent close at $147.76.

“1Q revenue guidance calls for $1,532 – $1,536M (~74% YoY), above consensus at ~$1,326M,” they wrote. “Adj. operating margin midpoint was set at ~57%, above consensus of 48.3%.”

Jefferies, which gave the stock a $70 target, noted that while the 4Q growth was broad (revenue up 70%, U.S. commercial up 137%), the valuation at 39x CY27E rev makes the stock less attractive.

UBS dropped their target from $205 to $180, still implying 22% upside. They said: “Palantir reported its 10th straight quarter of revs growth acceleration, a turnaround that we’ve never seen before.”

But added that their neutral rating was based on a 94x CY26e FCF valuation, not business performance.

Goldman Sachs reduced their target to $182, citing the 14% revenue guidance beat and a 700bps EBIT margin beat, but warned of growing competition in the AI space.

Deutsche Bank, with a $200 price target, said Palantir’s success in showing real AI value at scale was pushing them to rethink how they evaluate software companies. They wrote:-

“Put simply, the combination of growth, scale, and profitability definitely puts PLTR in a class by itself.”

Baird raised their view to outperform with a $200 target, saying they were convinced by the free cash flow potential. They had been cautious due to valuation, but now say the FCF multiple looks attractive based on 2027 scenarios.

Citi, which now has a $260 target (up from $235), said: “Q4 was another extraordinary print.” They cited triple-digit growth in total contract value and bookings and an initial FY26 guide that topped consensus by over 20%. Citi also noted $4.1 billion in projected adjusted free cash flow, beating the $3.1 billion expected.

Bank of America issued the most bullish call of all, assigning a $255 price target, saying Palantir’s AI-focused strategy is producing real results and warning peers that this kind of execution is the new bar. “We see these results cementing PLTR’s place as one which will survive and thrive in the chaos,” they said.

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