Palantir Technologies shares slipped on Thursday even as a wave of Wall Street analysts expressed optimism about the company's growth prospects ahead of its third-quarter earnings report. The stock fell 1.56% to $193.73, leaving it roughly 7% below its record closing high of $209.05 reached on October 9.
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.
Analyst Brian Essex believes Palantir is well-positioned as enterprises shift from experimenting with AI to seeking measurable returns. "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.
Essex added that Palantir's technology goes beyond automating 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," he said.
Other analysts are also anticipating strong results. 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, expecting revenue growth to potentially accelerate for the 13th consecutive quarter. The firm also sees positive contributions from Palantir's US commercial and government businesses and identifies 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 raised his price target to $260 from $225 and maintained a Buy rating, expecting strong revenue growth to continue into 2027.
Despite the optimistic outlook, Palantir's valuation remains a key consideration. 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.
Palantir shares have gained about 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.
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