Analyst Upgrade Fuels Optimism for Palantir Ahead of Earnings

Palantir US69608A1088

A notable upgrade from investment firm William Blair has cast a positive light on Palantir Technologies Inc. just hours before its quarterly earnings release. Market strategist Louie DiPalma raised his rating on the stock to "Outperform," setting a price target of $200 per share. This projection implies a potential upside of approximately 36% from current levels. The timing of this move is significant, coming after the stock's decline of nearly 29% from its November 2025 peak.

DiPalma views the recent share price weakness as a compelling entry point for a key player in the artificial intelligence supply chain. He noted that the stock had been caught in a broader sell-off affecting the entire software sector. Following this correction, the analyst believes the valuation has become more reasonable, presenting a strategic opportunity for investors.

The rationale for the upgrade is multifaceted. William Blair's independent analysis of both government and commercial contract trends continues to indicate robust momentum. DiPalma characterized the company's third-quarter performance as "impressive" and anticipates "very strong" results for the fourth quarter.

Market Anticipates Strong Quarterly Growth

Expectations for Palantir's Q4 2025 report are elevated. The market consensus projects substantial year-over-year growth:
- Adjusted earnings per share: An increase of 64%
- Revenue: A rise of 63%

Management is scheduled to host a conference call to discuss the results at 11:00 PM Central European Time.

Long-Term Financial Projections

Looking beyond the immediate report, DiPalma forecasts a significant expansion in profitability over the coming years. His model predicts the operating margin will climb from its current level of 50% to 65% within a five-year timeframe. Furthermore, he estimates the company's free cash flow could reach at least $7 billion by 2030.

While the analyst acknowledges that volatility may follow the earnings release, he expresses confidence in the stock's trajectory. DiPalma expects shares to surpass the $200 mark within the next twelve months. A critical factor for the market's reaction will be how executives articulate their ongoing AI-driven growth strategy and provide guidance on margin progression.