Palantir Technologies shares have delivered relatively modest gains this year despite strong revenue growth, but analysts expect the artificial intelligence software company to maintain its momentum ahead of its third-quarter earnings report.
JPMorgan initiated coverage of Palantir with an Overweight rating and a December 2027 price target of $262, implying potential upside of about 33% from Wednesday’s closing price of $196.81.
The bank also placed the stock on its positive catalyst watch ahead of the company’s November 2 earnings report.
Palantir shares PLTR fell 1.56% to $193.73 on Thursday, leaving them roughly 7% below their record closing high of $209.05 reached on October 9.
The stock has gained around 11% this year through Wednesday’s close, following a rise of more than 130% in 2025.
However, shares have climbed 56% since the company’s stronger-than-expected second-quarter earnings on August 3.
JPMorgan sees AI demand driving further growth
JPMorgan analyst Brian Essex expects Palantir to benefit as businesses move beyond experimenting with AI and focus more on generating measurable returns from the technology.
“As we move from a year where enterprises are just figuring out how to deploy the most transformational technology we have seen in our lifetimes to one where they are looking for return, Palantir is already delivering return on investment by leveraging its platform to fundamentally transform the business operations of its customers, and growth is accelerating,” Essex said in a research note.
He added that Palantir’s technology could help companies transform their operating models rather than simply automate individual processes.
“Palantir takes AI past the point of simply automating processes performed by humans. AI has the ability to transform entire business operating models, and this is the value that Palantir has been bringing to the table,” Essex said.
JPMorgan considers the company’s growth and profitability sufficient to support its valuation, despite the premium investors pay for its shares.
Analysts expect strong third-quarter results
Other analysts are also anticipating continued business momentum ahead of Palantir’s earnings announcement.
Morgan Stanley analysts Adam Wood and Sanjit Singh said their checks pointed to a potential third-quarter revenue beat, supported by healthy demand and limited signs of intensifying competition.
Morgan Stanley maintains an Equal Weight rating and a $205 price target.
Baird reiterated its Outperform rating and $250 price target on Thursday.
The firm expects strong quarterly results, with revenue growth potentially accelerating for the 13th consecutive quarter.
It also anticipates positive contributions from Palantir’s US commercial and government businesses.
Baird sees scope for the company’s financial projections to rise further.
The firm identified more than $9 billion in free cash flow in 2027 as a reasonable upside scenario, compared with its current estimate of $7.06 billion.
Rosenblatt analyst John McPeake also raised his price target to $260 from $225 and maintained a Buy rating, expecting strong revenue growth to continue into 2027.
High valuation remains a key consideration
Despite the optimistic outlook, Palantir’s valuation remains a potential concern for investors.
The stock trades at a forward price-to-earnings ratio of 89.38 times, compared with 18.93 times for the S&P 500.
This premium means the company must sustain strong growth to justify its market valuation.
Essex, however, argued that Palantir’s profitability and growth prospects support its valuation.
“Valuation is reasonable when taking into account the company’s uniquely profitable hypergrowth fundamentals, with potential for substantial disruptive upside within its primary market segments,” he said.
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