AI software company Palantir Technologies (PLTR) posted another strong quarter earlier this month, reporting $1.18 billion in revenue and an adjusted operating margin of 51%. But despite the strong results, one Wall Street analyst is urging caution. Freedom Capital Markets analyst Almas Almaganbetov raised his price target to $170 from $125, yet kept a Sell rating, warning the stock may now be priced for perfection.
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Notably, Palantir’s share price has slipped by double digits since the earnings call. Even with the recent pullback, PLTR stock is still up more than 127% year-to-date, driven by rising global defense spending and growing demand for AI software.
Q3 Results Beat Expectations
During the third quarter, the company reported rapid growth in its U.S. commercial business, which surged 121% year-over-year, driving record bookings and strong demand for its AIP platform.
Almaganbetov said the beat showed clear traction in the U.S. market and faster-than-expected adoption of Palantir’s AI software. However, he noted that Europe remained flat, continuing the slow pattern seen in recent quarters.
Why Analyst Remains Cautious on PLTR
Looking beyond next year, the analyst believes the outlook becomes less certain. He noted that U.S. commercial growth may cool after an unusually strong year, government and defense budgets could tighten, and ongoing hiring for AI talent may weigh on margins.
While he acknowledged the company’s strong results and steady demand, he said the stock already assumes several years of strong growth. In his view, the current valuation leaves very little room for disappointment.
Is PLTR a Good Stock to Buy?
While several Wall Street analysts acknowledge Palantir’s solid execution and robust AI-led growth, they are cautious due to the stock’s steep valuation. The Hold consensus rating on Palantir Technologies stock is based on 11 Holds, three Buys, and two Sell recommendations. The average PLTR stock price target of $187.87 indicates 9.14% possible upside from current levels.
