Analyst Confidence Fuels Bullish Outlook for Palantir Stock

Palantir US69608A1088

Wall Street's attention has returned to Palantir Technologies, this time centered on its formidable financial performance rather than its high-profile government contracts. Truist Securities initiated coverage of the data analytics firm on Tuesday, assigning a "Buy" rating and setting a price target of $223 per share. In his analysis, Truist strategist Arvind Ramnani positioned Palantir at the forefront of more than 100 software companies he reviewed, citing its industry-leading margins and superior growth metrics.

The rationale from Truist is notably specific. Palantir's free-cash-flow margin exceeds 40%, a level few competitors can match. For the third quarter of 2025, the company reported an adjusted operating margin of 51%, alongside a 63% surge in revenue to $1.18 billion. Its "Rule of 40" score, a key industry metric combining growth and profitability, reached an impressive 114%.

Truist contends that this powerful combination validates the stock's premium valuation. Although the price-to-earnings ratio stands above 400, the analysts believe there is significant potential for capital returns to shareholders.

Should investors sell immediately? Or is it worth buying Palantir?

Upcoming Quarterly Report in the Spotlight

Currently trading near $179, Palantir shares are maintaining a crucial support level between $173 and $174. Investor focus now shifts to the upcoming release of fourth-quarter 2025 results, scheduled for February 6, 2026. Market expectations are for revenue of approximately $1.34 billion and earnings per share of $0.23.

A critical area to watch will be the performance of Palantir's commercial U.S. business. The company's Artificial Intelligence Platform (AIP) has recently gained substantial traction in this segment, quieting previous skepticism. Another significant revenue increase would strongly support the thesis of sustainable scalability, likely providing further momentum for the share price.