UBS reduced its price target on Palantir Technologies Inc. (NASDAQ:PLTR) to $180.00 from $205.00 and maintained a Neutral rating on the shares. At a prevailing market price of $154.79, the stock sits well above InvestingPro's Fair Value assessment and is trading at a price-to-earnings ratio of 364.
The move by UBS follows what the bank called an "astounding" set of financial results from the data analytics company. Palantir reported 70% total revenue growth year-over-year and a remarkable 137% increase in U.S. commercial revenues, with the business now operating at a scale in excess of $2 billion. Those figures represent a meaningful acceleration versus the company's trailing twelve-month revenue growth of 47.23% and its five-year compound annual growth rate of 31%.
Palantir's government-facing operations also expanded rapidly. The U.S. government segment - driven largely by Department of Defense contracts - grew 66% despite an environment of cost-cutting pressures within that sector. Profitability metrics were similarly notable: the company reported operating margins of 57%, GAAP margins of 41%, and an 80.81% gross profit margin in its most recent quarter.
Looking ahead, Palantir provided guidance for 2026 that calls for 61% revenue growth and 57% margin levels. UBS had previously modeled 47% revenue growth for 2026; following the reported results the bank revised its internal revenue growth estimate for 2026 up to 70% from 47%.
Despite the strong operational performance, the stock has experienced recent volatility, falling 10.83% over the past week. InvestingPro data still rates Palantir's overall financial health as "GREAT," with particularly high scores for growth and cash flow.
UBS emphasized how Palantir's financial profile stands apart within the public software universe, asserting that "no other public software company has financials close to that of Palantir." The bank noted that only certain privately held firms - specifically Databricks, OpenAI, and Anthropic - show comparable growth characteristics.
Market participants have reached differing conclusions on valuation and near-term upside. Palantir's market capitalization is approaching $368 billion, and the stock has delivered one-year returns of 76.45%. Those gains have left the company with premium multiples even as some traditional valuation metrics flag overvaluation.
Other brokerages reacted to the quarter with a range of ratings and targets. Truist Securities reiterated a Buy rating and assigned a $223 price target, describing Palantir as an "AI pure-play victor." Piper Sandler increased its target to $230 and kept an Overweight rating after the fourth-quarter results, which included 57% EBIT margins. Wedbush reconfirmed an Outperform rating with a $230 target, citing the company's strong across-the-board performance.
Not all firms moved higher. Cantor Fitzgerald held its Neutral rating and kept a $198 target while acknowledging that the fourth-quarter results beat expectations by 5% overall and outperformed in U.S. commercial revenue by 6%. DA Davidson trimmed its price target to $180 from $215 but left a Neutral rating in place, noting strong U.S. demand for AI solutions following the earnings release.
Collectively, these analyst actions underline both the strength of Palantir's recent operating momentum and the divergence in views about the company's appropriate valuation and forward returns. The combination of rapid revenue expansion, high margins, government contract exposure, and investor sentiment around AI requires analysts and investors to weigh premium market pricing against robust financial metrics.
Summary
UBS lowered its Palantir price target to $180 from $205 while retaining a Neutral stance despite the company reporting 70% revenue growth, sharply higher U.S. commercial revenue, and strong profitability metrics. Other analysts have issued higher targets or reiterated positive ratings, creating a split in the sell-side view. Palantir trades at elevated multiples, with InvestingPro rating its financial health as "GREAT."
Key points
- UBS cut its price target to $180 but kept a Neutral rating; the stock trades at $154.79 and a P/E of 364.
- Palantir reported 70% total revenue growth, 137% U.S. commercial growth, and achieved 57% operating margins, 41% GAAP margins, and an 80.81% gross margin.
- Analyst reactions are mixed - some firms raised targets to $223 and $230, while others kept Neutral or trimmed targets, highlighting divergent views on valuation and forward growth.
Risks and uncertainties
- Valuation risk - the stock is trading at premium multiples and may be deemed overvalued by traditional metrics, which could amplify downside in broader market corrections.
- Sector and contract exposure - reliance on U.S. government contracts, particularly with the Department of Defense, creates sensitivity to defense spending and cost-cutting pressures.
- Analyst divergence and market volatility - differing analyst price targets and recent share price swings demonstrate uncertainty about how to price Palantir's rapid growth into long-term expectations.