Palantir stock is down 22% this year. Why did Oppenheimer advise buying them?

Investment bank Oppenheimer began tracking shares of artificial intelligence developer Palantir Technologies on April 30 with a buy recommendation and set a target price 44% above current levels. However, skeptics warn that the company's high valuation still falls short of reality - even after the stock has fallen 22% this year.

Oppenheimer initiated analyst coverage on Palantir with an Outperform rating ("Market Perform") and $200 target price on Thursday, April 30 - up 44% from the current level, Barron's reported.

The company is the "leading platform for deploying AI applications" among government and commercial customers, according to Oppenheimer analyst Param Singh. He sees Ontology's platform, which automates decision making for customers using AI, as a key competitive advantage. After implementing this platform, switching to competitors' solutions becomes extremely costly for businesses: this "moat", according to Singh, only deepens with each new workflow built on its basis.

Loop Capital has a similar stance, with analyst Mark Schappel maintaining a Buy rating and $220 target price a day earlier. Schappel wrote that Palantir's business is related to the "largest and fastest growing" segments of the software market, writes Barron's.

Wedbush analyst Daniel Ives on Wednesday, April 29, noted "significant momentum" in the company's growth, which he believes points to Palantir's technology continuing to spread among U.S. federal agencies, MarketWatch reports. Palantir could become a $1 trillion-capitalization company within a few years, Ives believes.

This optimism, however, is not shared by all. Analyst of RBC Capital Markets Rishi Jaluria kept this week rating Underperform ("Below market") with target price $90 - twice lower than current levels, noted Barron's. The analyst is picking up signs of possible commercial customer churn. Investors may also be unhappy with the lack of a dividend or share repurchase program - despite $7 billion in cash on the balance sheet, Jaluria noted.

Palantir stock has a total of 36 ratings from analysts covering the stock. Of these, ten recommend Hold, two recommend Sell, according to FactSec data cited by Barron's.

Since the beginning of the year, quotes of Palantir fell by 22%, although the broad market index S&P 500 for the same period rose by 5.3%. The stock slump is explained primarily by external factors: the entire enterprise software sector has come under pressure from concerns that new AI tools could disrupt traditional business models, MarketWatch writes.

At the same time, the company's business is growing. Revenue in the U.S. grew 75% to $3.3 billion in 2025, with revenue from the U.S. government adding 55%. Commercial revenue grew even faster, up 109% to nearly $1.4 billion, the company reported.

Palantir's government order book also continues to grow. Last week, Palantir won a $300 million bid from the U.S. Department of Agriculture, the Pentagon is requesting $2.3 billion from Congress for the Maven Smart System surveillance system in the 2027 budget, and the company is among the bidders for the Golden Dome, a U.S. missile defense system worth about $185 billion, MarketWatch recalls.

Palantir's first quarter 2026 report will be released on Monday, Ma. 4. Wall Street forecasts year-over-year growth in all key metrics, MarketWatch writes.

This article was AI-translated and verified by a human editor