HSBC Upgrades Palantir to Buy

HSBC analyst Stephen Bersey upgraded Palantir (NASDAQ: PLTR) from Hold to Buy with a price target of $205.00 (from $197.00).

“Revenue at USD1,407m was up 70% y-o-y and above HSBCe (USD1,342m) and consensus (USD 1,340m). Non-GAAP operating profit of USD798m grew 114% y-o-y to beat HSBCe and consensus by 13 14%.

Non-GAAP operating margin was 56.8%, +11.7ppt y-o-y and above HSBCe (52.8%) and consensus (52.2%). Non-GAAP EPS of USD0.25 was up 84.9% y-o-y and USD0.02 above HSBCe and consensus.

For 2026, non-GAAP operating profit guidance is USD4,134m (pre-results consensus: USD3,127m, pre-results HSBCe: USD4,222m).

We now expect 2026e revenue of USD7,527m, +68.2% y-o-y (2025: +56.2%) and non-GAAP operating profit of USD4,483m (2025: USD2,254m).

Though PLTR trades at a significant premium, we see continued strength for many quarters and think the stock merits support. We upgrade our rating to Buy (from Hold).

We expect a 58.8% US commercial segment revenue CAGR of 58.8% in 2025-29e to USD9.3bn in 2029 after surging 137% y-o-y to USD507m in 4Q25 (3Q25: +122%).

More importantly, total contract value (TVC) of new agreements was USD1,344m in 4Q25 (3Q25: USD1,310m), suggesting potential upside to its revenue run-rate, though we have seen anecdotes and reports suggesting that the ROIC on internal AI projects that enterprises are experimenting with (not specific to Palantir) is often disappointing.

This may slow the tempo of future contract signings, in our opinion.”

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