Palantir's Valuation Math Tightens as Wall Street Splits on the AI Defense Trade

Palantir shares sit within 2.7% of their 52-week high after 93% revenue growth, as analysts split on valuation ahead of Q3 results on November 2.

Palantir finds itself caught between two narratives that rarely coexist so uncomfortably: a business growing at a pace few software companies ever sustain, and a share price that leaves almost nothing to chance. The Denver-based data analytics firm closed Monday's European session at EUR 185.26, within 2.7% of its 52-week high of EUR 190.36 struck the same day — a proximity that says as much about momentum as it does about the absence of a cushion.

A Growth Engine Running at 93%

The numbers underpinning the rally are genuinely striking. Revenue climbed 93% year-over-year in the most recent quarter, while net dollar retention reached 157%. Those figures explain why the defense and intelligence establishment keeps returning to Palantir's data architecture, and why the company has become something close to unavoidable for Western militaries chasing algorithmic superiority.

Chief Technology Officer Shyam Sankar offered a window into that operational reality over the weekend in an interview with CBS. Mission planning for 1,000 strikes in a single day — work that once consumed 50 people across two weeks — can now be handled by one individual in four hours, drawing on more than 150 simultaneous data sources. Sankar also pushed back firmly against allegations tied to a February 28 attack on a school in Minab, Iran, where reports indicated at least 123 children were killed. He attributed the likely cause to human error and stressed that Palantir's Maven system does not select targets autonomously, adding that additional verification agents have since been integrated.

The Pentagon's quiet substitution of Anthropic models with software from OpenAI, xAI and Nvidia inside that same program illustrates how the industry actually operates. Palantir functions less as a conventional vendor and more as the connective tissue that keeps military infrastructure intact while individual model providers rotate in and out.

Regna AI Extends the Sovereign Push

That strategic anchoring is now being pushed further. Palantir and Ondas jointly announced the formation of Regna AI, a standalone entity tasked with building mission-specific models that run on edge hardware — inside drones, vehicles or command centers — capable of operating autonomously even when every network connection drops. Ondas serves as founding owner and first customer, while Palantir supplies the training infrastructure and contributes personnel to implementation.

The launch lands amid renewed public scrutiny of Palantir's government work. Internal ICE emails suggested investigators had considered using the company's ELITE platform to cross-check voter rolls as part of fraud inquiries. Palantir rejected that characterization outright, telling WIRED that voter roll data was never integrated into ELITE at any point. For a firm whose revenue rests heavily on government contracts, staying inside contractual and legal boundaries remains the price of keeping federal clients onside.

Banks Diverge as Earnings Approach

Wall Street's response to all of this has been anything but uniform. Baird raised its price target on Palantir to $250 from $200 on Monday, reaffirming an Outperform rating. Goldman Sachs had already upgraded the stock to Buy from Neutral the previous Thursday, setting a $230 target. Both houses pointed to swelling demand for tailored AI applications in regulated government domains. Barclays initiated coverage with an Overweight rating and a $265 target, framing Palantir as the indispensable architect of a new security order.

Not everyone is convinced the runway justifies the ticket price. Phillip Securities downgraded the shares to Neutral on Monday as part of a broader sector reassessment, with analyst Alif Fahmi holding a $215 target — a signal that after the recent multiple expansion, the valuation offers scant room for operational missteps.

The debate has effectively shifted from whether Palantir's technology works to whether the market has already paid for that answer several times over. Fresh operational detail arrives soon: the company has confirmed it will report third-quarter 2026 results on November 2 after the US market close.