Palantir Technologies is facing an earnings test after its recent slump. Shares of Palantir have lost 25% in the past three months amid a broader decline in software stocks , which are among the S & P 500's worst performers year to date on concerns of artificial intelligence disruption. One popular technical metric showed that Palantir was one of the market's most oversold stocks last week . For all that, however, Palantir is still ahead 81% over the past year. Now Wall Street is gearing up for Palantir's fourth-quarter financial results due after the market close on Monday. According to LSEG, analysts covering Palantir expect the company to report earnings of 23 cents per share on revenue of $1.329 billion in the December quarter. The company topped third-quarter estimates in November, when it reported adjusted earnings of 21 cents per share on revenue of $1.18 billion. Government sales, especially from high-profile military contracts, have been essential to Palantir's growth in recent quarters. The company's U.S. commercial business has also soared — more than doubling year-over-year in the previous period — after locking in new partnerships with Nvidia , Snowflake and others. Some analysts view the stock as a buying opportunity after its recent pullback, and see global geopolitical conflicts and a large U.S. defense budget as major catalysts for Palantir's future government and commercial revenue. Analyst Arvind Ramnani from Truist Securities, for example, pointed to Palantir's 40%+ free cash flow margins as positioning the company led by CEO Alex Karp to ramp up capital returns over time. PLTR 5Y mountain Palantir Technologies stock performance over the past five years. Still, opinions on the Street are varied. Of the 27 analysts surveyed by LSEG who cover the stock, only three rate it a strong buy while five give it a buy rating. Sixteen analysts maintain hold ratings, while two give it an underperform and one has a sell rating. The consensus price target suggests 26% potential upside, according to LSEG. Palantir's rapid ascent has also come with concerns about the stock's high valuation compared to tech giants with far greater profits. Take a look at what top firms are saying about Palantir ahead of earnings: William Blair: Outperform rating, $200 price target Analyst Louie DiPalma upgraded Palantir to outperform from market perform in a Monday note to clients. William Blair's proprietary government and commercial trackers indicate continued momentum for the company, he said. "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," DiPalma wrote. "In our view, the recent selloff creates a buying opportunity for Palantir as a leader in the AI supply chain." Citigroup: Buy, $235 Citi analyst Tyler Radke thinks Palantir will see significant expansion in its commercial business this year. The company's use of agentic AI and "the renewed urgency around defense globally are acutely aligned to PLTR's strength around data ontology and forward deployed engineering," he wrote in a Jan. 12 note to clients, which upgraded the shares to buy from neutral and raised his price target by $25 to $235. "Our upgrade is premised on our view that 2026 is poised to be another year of significant positive estimate revisions, with recent CIO + industry conversations suggesting AI budget and use cases are accelerating in the enterprise. We also see significant tailwinds in the Government, driven by accelerating defense budgets and modernization urgency," Radke said. RBC Capital Markets: Underperform, $50 RBC is one of the most bearish firms on Palantir. Analyst Rishi Jaluria said that his firm's checks on momentum for Palantir's commercial business suggest ongoing churn among enterprise clients. RBC's proprietary government tracker also suggests below-consensus, year-over-year government growth for Palantir's fourth quarter, he said. "We'll be looking for any evidence of a turnaround in commercial (improvements in [net retention rate], or signs of meaningful monetization from [artificial intelligence platform]). We remain cautious on Commercial growth given high levels of competition," Jaluria said in a Jan. 26 note. "We cannot rationalize why Palantir is the most expensive name in our software coverage. Absent a substantial beat-and-raise quarter elevating the NT growth trajectory, valuation seems unsustainable." Truist Securities: Buy, $223 Analyst Arvind Ramnani in January initiated research coverage of Palantir with a buy rating and $223 price target. The company has an "unparalleled financial profile" as it remains well-positioned to reap the benefits of increased AI adoption by both the government and commercial businesses, he wrote in a Jan. 6 note to clients. "We acknowledge the significant valuation premium PLTR commands, but continue to view it as a Buy given its significant opportunity to drive GenAI adoption for governments & enterprises," he said. "PLTR has seen material improvement in its momentum driven by the release of AIP, with top-line growth accelerating to 63% y/y from 13% y/y as of 2Q23 - with a larger portion of this growth flowing down to operating margins, reaching 50%+ margins. While much of the momentum has come from its U.S. business, we see international as a significant opportunity."
