By Mackenzie Tatananni
Palantir stock found itself among the casualties of a recent software selloff, but its growth story is intact, UBS analysts say. Don't believe them? Take it from Palantir's customers themselves.
In a research note Thursday, UBS upgraded the stock to Buy from Neutral with a $180 price target. Shares ticked 0.5% lower to $135.24 on Friday. The tech-heavy Nasdaq Composite was down 1.1%.
Given the 70% revenue growth Palantir achieved in the fourth quarter and its 2026 guidance for 61% growth, "the consensus view baked into the stock is that at least near-term, the company is facing extraordinary demand," analysts wrote. "As such, bullish checks are expected."
The firm recommends that investors take advantage of the stock's 35% move off its recent high "for the premier growth story in software" that sits at the nexus of artificial intelligence and data, the "two most powerful spending trends," according to UBS.
The near-term debate surrounding the shares is whether Palantir can sustain durable growth and whether other players such as Databricks, OpenAI, and Anthropic might arise as challengers.
The firm is a longtime supporter of Palantir, even quietly from the sidelines. UBS initiated coverage on the stock in December 2024. At the times, analysts "were quite positive on the company fundamentals then and ever since." Concerns over Palantir's lofty valuation stood in the way of a Buy rating at the time, but those have abated amid a broad-based software selloff.
Given lingering concerns that the AI boom has run its course, the analysts may sound overly enthusiastic. Don't believe them? Palantir's customers are just as positive.
To underscore their conviction in Palantir's growth story, the firm spoke with several of customers and partners. These conversations "reaffirmed our view that Palantir is facing significant demand for AI and data software, with use case expansion in the existing customer base and no material emerging competition," analysts wrote.
One Palantir Vanguard Elite partner pointed to continued opportunities for expansion in the government sector. "The Army went all in on logistics in Palantir with Vantage," the partner said, noting that most other agencies have implemented its software to some degree -- including the Space Force and Air Force -- and adding cryptically that "a number of three- or four-letter agencies" were starting to expand.
A second partner noted that many clients turned to Palantir for "speed to value," asserting that the company was "good at stitching data together," which gives it an edge over players like Anthropic, the developer of Claude Code.
A third customer working in healthcare IT noted that the Palantir spend would be close to $50 million by the end of the year after starting at the $30 million to $35 million range.
Many of the players whose customer relation management software is used in the pharmaceutical industry today "are not capable of generating these insights," the customer said, adding that "most companies won't leverage their AI capabilities."
UBS analysts asserted that this view reflects "the AI disruption bear case on application software," with incumbent CRM applications serving merely as data stores that can be accessed by Palantir "to extract real insights for customers."
They aren't the only bulls. On Friday, Rosenblatt Securities initiated coverage on shares of the data-analytics company with a Buy rating and $150 price target.
Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
February 27, 2026 13:06 ET (18:06 GMT)
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