Palantir upgraded to ‘Buy’ by UBS on strong AI and data demand Proactive uses images sourced from Shutterstock
UBS upgraded Palantir Technologies Inc (NYSE:PLTR) shares to ‘Buy’ from ‘Neutral,’ highlighting the software company’s positioning at the intersection of artificial intelligence (AI) and data spending.
The analysts wrote that investors should consider “taking advantage of this -35% move off the peak for the premier growth story in software.”
They cited the company’s projected 70% revenue growth in 2026 and mid-50% operating margins as factors making the stock “very attractive” at 50 times UBS’s 2027 free cash flow (FCF) estimates.
The analysts also noted that Palantir continues to see robust demand. “Our latest checks supports a view that Palantir is facing a very strong demand backdrop as it sits at the intersection of AI and data spend,” they wrote. “This investment ramp in AI models and data is occurring right now, with Palantir a clear AI winner.”
On valuation, the UBS team wrote that while the stock has historically traded at high multiples, the recent pullback and upward revisions to estimates have made Palantir more accessible.
“If one assumes that Palantir can grow at a ~50% CAGR for the next three years, then the next-year FCF multiple is now down to 1x the projected growth rate,” they wrote, noting that this level could support a strong valuation case for investors.
The bank set a 12-month price target of $180 on Palantir, up roughly 34% from current levels.
This price target is based on a 2027 FCF multiple of 69 times, and noted that Palantir’s position across AI, data, and modern defense technology warrants a premium in valuation.