On November 3rd, Morgan Stanley raised its price target for Palantir Technologies (PLTR) from $205 to $233, while maintaining an "Equal Weight" rating.
The firm believes that Palantir's AI business momentum is robust, with demand from enterprise and government clients continuing to expand, driving revenue growth acceleration for the 13th consecutive quarter.
In the third quarter, the company's revenue grew 96% year-over-year, while its operating margin improved by nearly 11 percentage points year-over-year to 61.7%, bringing the sum of growth rate and profit margin to 158%.
Morgan Stanley noted that Palantir's U.S. commercial business revenue grew 148% year-over-year in the third quarter, while U.S. government business revenue growth accelerated from 90% in the second quarter to 96%.
Meanwhile, sovereign AI demand is emerging as a new growth driver. Palantir allows clients to post-train open-weight AI models using their own operational data, enhancing model performance and reducing application costs while retaining control over data and models, thereby expanding the application of AI technology across enterprises and government agencies.
Based on strong business performance and AI application prospects, Morgan Stanley significantly raised its 2027 revenue growth forecast for Palantir from 45% to 65%, and its operating margin forecast from 61% to 63.5%. The firm believes that Palantir's competitive advantages in enterprise data integration and AI model deployment will enable it to continue benefiting from the proliferation of open-weight models.
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