William Blair Upgrades Palantir to Outperform

William Blair analyst Louie DiPalma upgraded Palantir (NASDAQ: PLTR) from Market Perform to Outperform.

“We have upgraded shares of Palantir ahead of earnings following its recent 30% selloff, as our Dotted Line government tracker and our separate commercial tracker indicate that Palantir’s momentum has continued.

The new administration continues to go all-in with Palantir and enterprises are adding workflows, which contributed to an astounding Rule-of-114 September quarter, and likely a very strong December quarter.

Although Palantir’s valuation is still frothy, it appears more reasonable relative to recent venture rounds for companies tied to the AI ecosystem.

Despite the momentum, Palantir shares have not been immune to the broader software vibe coding selloff.

While the earnings-day reaction will surely be volatile, we are expecting a positive move based on our Dotted Line tracker data and industry discussions.

Even if shares decline post-earnings as they did last quarter, we expect shares to return to greater than $200 over the next 12 months as positive developments suggest the hyper-growth and margin expansion can continue.

We were previously concerned about Palantir shares primarily because of the prior administration’s desire to diversify key data analytics platforms away from sole-sourcing to Palantir to avoid vendor lock-in.

We upgraded shares to Market Perform last March following the DOGE-inspired selloff at $84 per share as the risk/reward became more attractive under the new administration (Upgrading to Market Perform on 33% Pullback; Rich AI Pipeline Helps Offset Frothy Valuation).

In our view, the recent selloff creates a buying opportunity for Palantir as a leader in the AI supply chain.”

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