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Bank of America Reaffirms Palantir as a 2026 Top Pick as Valuation Debate Deepens

Forthcoming Q4 results will test whether recent margin gains justify Palantir’s premium valuation.

Overview

  • Bank of America kept Palantir on its U.S. 1 Buy list for 2026, citing accelerating adoption of its Artificial Intelligence Platform and resilient government demand.
  • Shares have more than doubled over the past year but trade at steep levels, including roughly 209x forward earnings and over 110x revenue.
  • Profitability has strengthened, with a GAAP operating margin near 33%, an adjusted operating margin of 51%, and a profit margin above 16%.
  • A Seeking Alpha analysis on Jan. 28 set a base-case target of $183.84, pointing to operating leverage, free cash flow, and an unused $1 billion buyback while flagging more limited near-term upside.
  • Investors are watching early-February earnings and recent developments—such as a reported Hyundai deal worth hundreds of millions and a new EMEA data center collaboration—for evidence that growth can support current multiples.