‘The Acceleration Will Continue,’ Says BofA About Palantir Stock – Offers Street-High Price Target

Palantir (NASDAQ:PLTR) stock’s incredible runup appears to be taking a breather for now, despite the big data AI company delivering a beat-and-raise Q3 readout.

The shares are up 273% over the past year, with the company one of Wall Street’s biggest AI beneficiaries. Yet, the stock slid by 8% following the latest quarterly statement, as valuation concerns still linger. Additionally, “Big Short” investor Michael Burry decided to spoil the party by revealing he had placed large bearish bets on Palantir (and Nvidia) through put options – contracts that gain value when stock prices decline.

So, is bearish sentiment about to change the narrative on this huge growth story? Not according to BofA’s Mariana Perez Mora, an analyst ranked among the top 2% on Wall Street. “Palantir once again proved its growth engine is firing on all cylinders, with the commercial segment leading gains and margins hitting record highs,” the 5-star analyst said.

Revenue rose 63% year-over-year, driven by a strong commercial performance, which climbed 73%. U.S. commercial sales were the standout, surging 121% YoY as demand for AIP continued to gain traction. “In our view,” Perez Mora went on to explain, “the surge reflects not just appetitive for AI, but a growing recognition among enterprises that Palantir’s platform delivers measurables results, and that scaling AIP across operations is becoming a competitive necessity, reflected by a 45% Y/Y expansion in its customer base and 38% Y/Y increase in top 20 customers’ average sales.”

Meanwhile, “customer throughput” – from initial adoption to expanded deployment – is accelerating. During the quarter, total customer count rose 45% YoY, while U.S. commercial customers grew 65%. Alongside a larger user base, contract sizes are also increasing, with deals exceeding $10 million up threefold and those over $5 million rising 2.5 times YoY. Government revenue also saw strong acceleration, up 55% YoY.

Given Palantir benefits from the expanding network effects of its customer base, Perez Mora expects the acceleration to continue. In addition to revenue growth driven by new and expanding users, margins are likely to strengthen. Greater internal use of AI FDEs, AIP bootcamps, utilization of existing use cases, and a growing network of partners should all benefit margins.

Perez Mora continues to see Palantir as the “best-in-class AI enabler, integrator, architect, and developer across peers.” The analyst believes this is evident in the company’s accelerating growth, expanding customer spend, and ongoing new wins – particularly when compared with findings from MIT Nanda’s July report, “State of AI in Business 2025.” That report, which reviewed 300 public AI implementations, found that 95% of organizations have yet to see measurable returns. “Here PLTR remains the exception to another rule, showcasing the success and savings for customers in Government and Commercial market,” the analyst said.

All of that merits a new price objective and a Street-high one at that. Perez Mora’s new PO stands at $255 (up from $215), suggesting the shares will gain 34% over the coming months. Hardly needs adding, Perez Mora’s rating stays a Buy. (To watch Perez Mora’s track record, click here)

However, only 2 other analysts join the BofA expert in the bull camp, and with an additional 11 Holds and 2 Sells, the analyst consensus rates the stock a Hold. The average target is a more conservative $185.2, implying shares will stay rangebound for the time being. (See Palantir stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.