Palantir Sales Growth Expected to Soar as Price Target Raised

Palantir Technologies Inc. (PLTR) is experiencing renewed market optimism, fueled by a recent analyst upgrade and projections of substantial revenue growth. 

The positive sentiment surrounding Palantir follows Citi's upgrade of the stock from “Neutral” to “Buy,” accompanied by a price target increase to $235 from $210. This adjustment reflects Citi's anticipation of significantly higher consensus estimates for Palantir in 2026, driven by accelerating enterprise adoption and a potential “supercycle” within the government sector due to increased defense spending and modernization initiatives.

Citi's projections suggest that Palantir could achieve a remarkable 70%-80% revenue growth in 2026. This optimistic outlook is supported by the company's recent financial results. In Q3 2025, Palantir reported a 63% year-over-year increase in total revenue, reaching $1.181 billion. Notably, U.S. commercial revenue surged 121% year-over-year to $397 million, demonstrating Palantir's growing presence in the commercial sector.

Palantir's expansion is also propelled by strategic partnerships and significant government contracts. The company's five-year agreement with the UK's Ministry of Defence, valued at up to £750 million, represents its first billion-dollar deal outside the United States. This partnership underscores Palantir's growing global footprint and its ability to secure substantial contracts in the defense sector.

In terms of financial performance, Palantir reported a GAAP operating margin of 33% and an adjusted operating margin of 51% in Q3 2025, highlighting efficient cost management and profitability. The company's adjusted free cash flow for the quarter was $540 million, with a 46% margin, demonstrating its ability to generate substantial cash flow.

While the outlook for Palantir appears promising, some analysts express caution regarding the company's valuation. The stock's price-to-sales multiple is considered high, suggesting that much of the anticipated growth may already be factored into the current stock price. This valuation concern is set against the company's impressive growth metrics, leading to a good battle between bulls and bears over recent months.