Key Points
Palantir Technologies (NASDAQ: PLTR) has lost its mojo on the stock market in recent months. The stock hit a 52-week high on Nov. 3 last year, and since then, it has shed just over 37% of its value as of this writing.
Investors have been selling Palantir stock due to its expensive valuation and concerns that AI start-up Anthropic’s offerings could dent the company’s growth. However, Wall Street analysts are anticipating a major turnaround in Palantir’s fortunes over the coming year. But will it live up to their expectations?
Let’s find out.
Wall Street’s price target points toward a big stock price jump
Palantir has a median 12-month price target of $200, according to 34 analysts covering the stock, suggesting potential gains of 55% from current levels. The Street-high price target of $255 is even more optimistic, suggesting Palantir could nearly double.
What’s worth noting is that 21 analysts rate Palantir as a buy. Meanwhile, 11 analysts rate it as a hold, and 2 suggest selling Palantir. So, the stock seems to be viewed favorably by Wall Street analysts, with a majority recommending a buy following its pullback in recent months. It is easy to see why that’s the case despite Palantir’s valuation.
The company’s numbers clearly indicate that it is capitalizing on the fast-growing AI software platforms market, despite the perceived competition from Anthropic.
Data by YCharts
Palantir introduced its Artificial Intelligence Platform (AIP) in April 2023 to help enterprises and federal customers integrate AI software tools into their operations. The chart above shows that AIP has been instrumental in accelerating Palantir’s growth over the past three years. The good news is that Palantir’s acceleration is here to stay, and that’s why there is a possibility that the stock will live up to Wall Street’s expectations over the coming year.
Palantir’s ability to clock faster-than-expected earnings growth can send the stock soaring
Palantir’s earnings per share are expected to jump by 97% in 2026 to $1.48, according to consensus estimates. However, the 42% growth projection for 2027 points toward a significant slowdown.
Palantir’s earnings per share increased by 154% year over year in Q1 this year. The strong demand for its AI software solutions prompted it to raise its 2026 guidance. Palantir’s stronger guidance and phenomenal earnings growth stem from healthy growth in its customer base and increased spending by existing customers.
Palantir’s customer count increased by 31% in Q1, and its total contract value of $2.41 billion increased at a faster pace of 61% year over year. That’s not surprising, as customers such as GE Aerospace, SAP, and others have been witnessing substantial productivity improvements and cost reductions after deploying Palantir solutions. Another point worth noting is that Palantir’s remaining deal value was an impressive $11.8 billion at the end of Q1, almost doubling from the prior year period.
This impressive pipeline of unfulfilled contracts can help Palantir sustain triple-digit-plus earnings growth rates over the coming year, well ahead of consensus expectations. That could boost investor confidence in this AI stock and help Palantir indeed reach the median Wall Street price target in a year.
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Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends GE Aerospace and Palantir Technologies. The Motley Fool recommends SAP. The Motley Fool has a disclosure policy.
