TLDR
Two Wall Street analysts upgraded Palantir to Buy on February 3, 2026, setting price targets between $200-$205
Fourth quarter revenue hit $1.407 billion, representing 70% year-over-year growth
U.S. commercial revenue jumped 137% to $507 million in Q4 2025
Non-GAAP operating margin reached 56.8%, up 11.7 percentage points from last year
Analysts boosted 2027 free cash flow estimates from $4 billion to nearly $6 billion
Palantir Technologies caught the attention of two major Wall Street firms this week. Both upgraded the stock to Buy on February 3, 2026.
William Power from Baird issued a $200 price target. Stephen Bersey from HSBC went even higher at $205. The upgrades followed the company’s fourth quarter earnings release.
Q4 2025 revenue came in at $1.407 billion. That’s a 70% increase compared to the same quarter last year. The number beat analyst expectations handily.
Wall Street had projected lower figures. HSBC estimated $1.342 billion while consensus forecasts called for $1.340 billion. Palantir surpassed both marks.
Non-GAAP operating profit reached $798 million in the quarter. That represents 114% growth year-over-year. The company achieved a 56.8% non-GAAP operating margin, expanding 11.7 percentage points from last year.
Non-GAAP earnings per share landed at $0.25. The figure beat estimates by $0.02 and showed 84.9% growth.
Strong Momentum in Commercial Sector
The U.S. commercial segment posted exceptional results. Revenue in this division hit $507 million, up 137% year-over-year.
HSBC expects the U.S. commercial business to grow at a 58.8% compound annual rate through 2029. This segment is capturing enterprise demand for AI implementation.
Power from Baird described Palantir as “one of the clearest AI winners” available to investors. He pointed to ten consecutive quarters of accelerating revenue growth.
The analyst views the company’s technology as an AI-powered central operating system. It helps Western institutions connect data with applications across government and commercial use cases.
Cash Flow Projections Rise Sharply
Power made a major revision to his cash flow forecast. He raised his 2027 free cash flow estimate from $4 billion to nearly $6 billion. He also outlined a bull scenario reaching $7-8 billion.
The analyst said free cash flow is “exploding” as the company scales operations. He believes the recent pullback in share price has created better value based on cash flow metrics.
Bersey from HSBC focused on forward guidance. Palantir provided 2026 non-GAAP operating profit guidance of $4.134 billion. That’s well above the pre-results consensus of $3.127 billion.
HSBC now projects 2026 revenue will reach $7.527 billion, up 68.2% year-over-year. The firm expects non-GAAP operating profit of $4.483 billion for the full year.
Total contract value for new agreements reached $1.344 billion in Q4 2025. That’s higher than the $1.310 billion reported in the previous quarter. The metric suggests accelerating customer demand.
Bersey noted some risks on the horizon. Government contracts could face pressure if global tensions ease. Questions remain about whether enterprise AI investments will deliver expected returns.
The stock has climbed 52.1% over the past 12 months. Shares dropped 9.3% in the past month but ticked up 0.3% over the past week. The most recent closing price was $157.88.
Wall Street analysts maintain a Moderate Buy consensus rating on the stock. The average 12-month price target stands at $190.40.
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