Key Takeaways
- Dan Ives from Wedbush named Palantir his preferred software stock beyond the Magnificent Seven, highlighting “stunning” Q4 performance
- The analyst believes AI adoption remains in its “third inning,” positioning U.S. government contracts to potentially exceed trillions of dollars
- Approximately $20M in revenue reclassification from commercial to government segments impacted Palantir’s commercial figures, which Ives characterized as non-recurring
- Shares have declined over 17% year-to-date in 2026, though valuation metrics now fall below five-year historical averages, with forward P/E at 132x
- Analyst consensus stands at “Moderate Buy” with an average price target of $195.04, suggesting approximately 32% upside potential
Wedbush Securities analyst Dan Ives appeared on CNBC with strong conviction about Palantir’s positioning in the software landscape. He identified it as his top choice among software companies excluding the Magnificent Seven tech giants, emphasizing that the artificial intelligence investment cycle remains in early phases.
Palantir Technologies Inc., PLTR
Ives employed a baseball metaphor to counter growing market concerns about an AI bubble, characterizing the current stage as the “third inning.” His perspective: AI adoption is gaining momentum rather than reaching saturation.
Shares of PLTR have tumbled over 17% since the start of 2026. Nevertheless, Ives characterized the company’s latest quarterly performance as “stunning” and positioned Palantir in “a whole other category” relative to peer software companies.
The equity has retreated from elevated valuation levels, currently trading beneath its five-year historical average across multiple metrics. However, investors should note the forward price-to-earnings ratio of 132x still represents a significant premium.
Palantir delivered Q4 fiscal 2025 revenue of $1.41 billion — representing 70% year-over-year growth. U.S. market revenue reached $1.08 billion, surging 93% compared to the prior-year period.
Full fiscal year 2025 revenue totaled $4.475 billion, marking 56% annual growth. GAAP earnings per share for Q4 registered at $0.24, while full-year GAAP EPS landed at $0.63.
Addressing Commercial Revenue Concerns
Criticism surrounding Palantir’s most recent quarter centered on commercial revenue underperforming expectations. Ives quickly addressed this concern — approximately $20 million transferred from commercial to government categories due to a single contract reclassification.
He positioned this as an accounting adjustment rather than an indicator of underlying business weakness. According to Ives, government AI demand represents the narrative investors should prioritize.
Ives described U.S. government AI expenditure as “the golden goose.” He projected contracts could reach hundreds of billions in the near term, with long-range potential extending into trillions.
“For many of these software providers, government revenue could potentially double within the next two to three years,” Ives stated during his CNBC appearance.
Cybersecurity Opportunities and Agentic AI Expansion
Ives also highlighted cybersecurity as a major beneficiary of AI infrastructure expansion. He projected security budgets could increase 50% as agentic AI systems create more sophisticated threat environments.
He characterized this as “the most connected trade” he had witnessed — indicating the AI infrastructure buildout and corresponding security investments are fundamentally intertwined.
Regarding regulatory concerns, Ives expressed doubt that oversight would materially impede industry progress. He argued that technological advancement outpaces any regulatory framework’s ability to respond effectively.
Palantir’s forward outlook indicated Q1 2026 revenue between $1.532 billion and $1.536 billion. Full-year 2026 revenue guidance spans $7.182 billion to $7.198 billion.
U.S. commercial revenue specifically is forecast to exceed $3.144 billion for the complete fiscal year.
Rosenblatt Securities maintained its Buy rating on PLTR with a $200 price objective on April 24. Mizuho preserved its Outperform stance while reducing its target from $195 to $185.
Across 28 analyst ratings, the consensus recommendation stands at “Moderate Buy” with an average price target of $195.04 — approximately 32% higher than current market prices.
