Investment firm William Blair has upgraded its rating on Palantir (PLTR) from Underperform to Market Perform due to the AI software company’s recent share price decline. Indeed, Palantir’s stock has plunged from $125 per share over the past three weeks, which now makes it more attractive to investors. As a result of the upgrade, shares of Palantir are up in today’s trading. However, William Blair analysts still warned that Palantir’s valuation is still relatively high and downside risks are still present, especially if it sees government contract delays. It is also worth noting that the firm did not assign a price target.
Nevertheless, William Blair likes Palantir’s strong revenue growth and operating margins. In fact, the company’s revenue is expected to grow by 31% in 2025, with operating margins of 45%. This impressive financial performance is largely due to Palantir’s ability to achieve significant revenue growth with minimal hiring. Interestingly, between 2022 and 2024, Palantir’s revenue grew by 50% while its headcount increased by only 3%.
Looking ahead, William Blair expects Palantir to win new contracts with the U.S. government. This includes a centralized payment tracking system that will be used to help with cost-cutting strategies and the Department of Defense’s annual audit. The company is also looking for additional contracts with the U.S. Army. As a result, Palantir’s stock is becoming increasingly attractive to investors despite valuation concerns.
What Is the Prediction for PLTR Stock?
Turning to Wall Street, analysts have a Hold consensus rating on PLTR stock based on four Buys, nine Holds, and five Sells assigned in the past three months, as indicated by the graphic below. After a 236% rally in its share price over the past year, the average PLTR price target of $93.13 per share implies 5.8% upside potential.
