Palantir stock is down 20% YTD: analysts see reversal ahead

Shares of Palantir Technologies rose in morning trading following a fresh round of bullish analyst commentary, though the stock gave up much of its early gains by midday as broader market weakness took hold.

At the time of writing on Friday, the Palantir stock was down around 0.6%. On a year-to-date basis, the stock is down around 20%.

The broader market was under pressure, with the Dow Jones Industrial Average falling 535 points, or 1.1%.

The S&P 500 declined 0.6%, while the Nasdaq Composite dropped 0.9%.

All three major benchmarks are in negative territory for February, reflecting growing investor anxiety about the economic and industry impact of artificial intelligence.

Rosenblatt initiates with buy rating

Rosenblatt Securities initiated coverage on Palantir with a Buy rating and a $150 price target.

The firm described Palantir as a market-disrupting AI software leader with a distinctive competitive position.

Rosenblatt cited a sustainable growth trajectory and operating leverage as key factors underpinning its positive outlook.

The analyst pointed to revenue growth of 56% over the last 12 months and a gross profit margin of 82% as evidence of strong underlying fundamentals.

Palantir shares have declined approximately 33% from their October high, and Rosenblatt said the current level represents an attractive entry point.

UBS upgrade highlights “premier growth story”

Separately, UBS upgraded Palantir to Buy from Neutral, arguing that the recent 30% pullback from peak levels has created a compelling opportunity.

“We recommend that investors take advantage of this -35% move off the peak for the premier growth story in software and a company that is at the nexus of the two most powerful spending trends – AI and Data,” analysts led by Karl Keirstead wrote.

The firm said Palantir now trades at 50 times its 2027 free cash flow estimates, which it considers attractive given its projection of 70% revenue growth in 2026 and stable mid-50% margins.

UBS also cited continued strong demand signals, noting that partner and customer checks indicate enterprises are accelerating AI adoption.

A central debate among investors concerns the sustainability of Palantir’s 50%-plus growth and whether competition from hyperscalers, Databricks, or AI model providers could intensify.

UBS said its latest checks did not reveal “any material emerging competition,” suggesting that Palantir’s positioning remains intact for now.

The positive assessments follow a similar upgrade last week from Mizuho Securities.

Mizuho sees improved risk-reward

In a research note, Mizuho analyst Gregg Moskowitz upgraded Palantir to Outperform from Neutral and set a $195 price target.

“We had for months stated a concern that PLTR shares could suddenly be subject to meaningful multiple reversion at some point,” Moskowitz wrote.

He said the recent pullback has reduced valuation risk and improved the stock’s risk-reward profile.

According to Moskowitz, Palantir’s combination of revenue growth and margin expansion places it “in a category of one” within the software sector.

Despite the wave of upgrades, Palantir’s gains were limited as the broader market remained under pressure.

February has been marked by volatility, particularly in technology and software stocks, as investors weigh the long-term economic implications of AI-driven disruption.