Financial institution of America wasted little time in making its view on Palantir (PLTR) clear after one other Q1 earnings stunner.
The financial institution maintained its bullish stance on the inventory, arguing that Palantir’s AI endeavors are exhibiting up in its gross sales, margins, contracts, and ahead steerage.
Palantir has been a battleground inventory for years, and bearish circumstances surrounding the corporate have drawn explicit consideration from traders like Michael Burry and others in search of readability on the huge wave of AI spending.
Other than the plain moral considerations tied to its software program being utilized in conflict, bullish traders view Palantir as one of many few firms turning AI hype into real-world enterprise and authorities purposes.
On the flipside, the bears fear the inventory has already priced in a number of years of progress.
Up to now, Financial institution of America feels the bull case is much more compelling.
Consequently, it reiterated its Purchase ranking and $255 value goal on the inventory, hailing its Q1 outcomes as a “step-function” print.
Moreover, BofA additionally bumped its 2026 gross sales estimate to $7.85 billion from $7.37 billion and lifted its 2026 EPS estimate to $1.47 from $1.30 as the corporate’s AI instruments transfer towards real-world AI deployment.
Palantir’s U.S. enterprise powers a blowout Q1
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Palantir Applied sciences turned in one other Q1 report, with adjusted earnings per share of 33 cents.
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Income surged 84.4% year-over-year to $1.63 billion, beating analyst forecasts by a snug margin.
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The corporate’s U.S. enterprise remained the largest driver, with gross sales rising greater than 50% to $1.28 billion.
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U.S. business gross sales skyrocketed 133%, whereas U.S. authorities income shot up 84%.
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Palantir secured 72 offers value practically $5 million and 47 value at the least $10 million.
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Administration bumped its 2026 income, adjusted working revenue, and free money move steerage.
Supply: Palantir Investor Relations.
Financial institution of America sees extra room for Palantir to run
Bofa’s main argument for Palantir’s bull case is that it isn’t promoting AI as a unfastened device.
Extra Palantir
As a substitute it’s promoting an AI-powered system serving to non-public enterprises and the federal government truly makes use of inside difficult operations.
That’s enormous as a result of most companies are actually shifting previous primary entry to massive language fashions and towards structured AI deployments, that entail governance, context, and integration.
These are precisely the issues Palantir focuses on with AIP, Foundry, Ontology, and Apollo.
Its authorities enterprise, significantly Maven, stays the crown jewel, with BofA highlighting 84% progress that underscored a pointy improve in Maven Sensible System utilization, together with future funding tied to Maven and the Joint Fires Community.
On prime of that, the business aspect additionally continues to impress, rising 18% on a sequential foundation, supporting the financial institution’s view that that Palantir’s progress story is simply getting began.
Palantir earnings historical past
Palantir has been a constant outperformer, posting sturdy top-and-bottom-line beats, backed by excellent year-over-year gross sales progress accelerating throughout the previous 4 quarters.
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FQ1 2026: EPS of $0.33 beat by $0.05, whereas income of $1.63 billion beat by $90.91 million, with YoY progress of 84.71%.
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FQ4 2025: EPS of $0.25 beat by $0.02, whereas income of $1.41 billion beat by $65.44 million, with YoY progress of 70.00%.
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FQ3 2025: EPS of $0.21 beat by $0.04, whereas income of $1.18 billion beat by $89.45 million, with YoY progress of 62.79%.
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FQ2 2025: EPS of $0.16 beat by $0.02, whereas income of $1.00 billion beat by $64.23 million, with YoY progress of 48.01%.
Supply: Searching for Alpha.
Wall Road value targets for Palantir inventory publish earnings
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Wedbush reiterated an Outperform ranking with a $230 value goal.
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Rosenblatt raised its value goal to $225 from $200.
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DA Davidson lowered its value goal to $165 from $180.
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RBC reiterated an Underperform ranking with a $90 value goal.
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Oppenheimer has an Outperform ranking with a $200 value goal.
Dangers to Palantir’s bull thesis
Financial institution of America feels there’s a lot to love about Palantir inventory, but it surely nonetheless must clear a remarkably excessive bar.
The primary and most evident danger stays market progress.
Palantir wants constantly excessive demand for AI platforms to proceed to maintain the ball rolling and broaden swiftly throughout companies and authorities businesses.
Any delayed tasks or a pullback in spending may lead to a substantial re-rating of its top-line expectations.
The second main danger to think about is pricing energy.
BofA analysts warned that faster-than-expected commoditization will damage its thesis.
That primarily factors to AI instruments turning into so much simpler to repeat, cheaper to purchase, and more durable to promote on the costs Palantir costs its prospects.
Then there’s the danger from the rising competitors within the AI area.
OpenAI, Anthropic, Meta, cloud firms, and enterprise software program distributors proceed to push deeper into AI, and if its rivals slender the hole, the inventory will lose a ton of its premium.
Talking of premium, the inventory is buying and selling at over 101 occasions ahead non-GAAP earnings, 321% above the sector median, in keeping with Searching for Alpha.
Much more startling is that it’s buying and selling at virtually 48 occasions ahead gross sales, which is 1,367% above the sector median.
On prime of that, public sector danger is one other main concern.
Authorities patrons have the tendency to be sluggish, political, and cautious. Particularly, BofA flagged stronger-than-expected pushback from public sector prospects to business off-the-shelf software program as a serious danger.
Palantir inventory returns vs the S&P 500
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Over the previous week, Palantir inventory fell 5.02%, whereas the S&P 500 rose 1.19%.
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Over the previous month, it fell 8.45%, whereas the S&P 500 rose 10.28%.
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Over the previous six months, it fell 28.75%, whereas the S&P 500 rose 7.20%.
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12 months to this point, it fell 23.54%, whereas the S&P 500 rose 6.04%.
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Over the previous yr, it rose 9.36%, whereas the S&P 500 rose 27.65%.
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Over the previous three years, it rose 1,741.60%, whereas the S&P 500 rose 78.75%.
Supply: Searching for Alpha.
Associated: Cathie Wooden sells $11.8 million in Nvidia-backed inventory earlier than earnings
This story was initially printed by TheStreet on Could 6, 2026, the place it first appeared within the Investing part. Add TheStreet as a Most popular Supply by clicking right here.
