Palantir Stock Price Forecast - PLTR Reloads After a 30% Hit: Hyper-Growth at a 98x P/E Near $135

Palantir Stock (NASDAQ:PLTR): Hyper-Growth At A Premium After A 30% Reset

Palantir Stock (NASDAQ:PLTR): Trading Zone, Pullback And Multiple Compression

Real-time chart: https://www.tradingnews.com/Stocks/PLTR/real_time_chart
Palantir Stock (NASDAQ:PLTR) trades around 134–135 USD after a drawdown of roughly 30% from peaks above 200 USD over the last year. The forward P/E sits near 98, while year-over-year revenue growth is running in the mid-50s to 70% range depending on the time frame you pick. That combination puts Palantir in the top bracket of the market on both growth and valuation. The reset matters: the blended earnings multiple has already dropped from more than 150x to under 100x even as the company delivered one of its strongest quarters so far, with Q4 revenue of about 1.41 billion USD, up 70% year over year, and operating income near 575 million USD with operating margin above 40%. The stock has effectively been punished in line with the broader software complex, while the underlying business profile is distinctly stronger than the average name in the software ETF basket.

Revenue Momentum And Rule-Of-40 Muscle At Palantir Stock (NASDAQ:PLTR)

The top-line story is simple and aggressive. Q4 revenue came in around 1.407 billion USD, up roughly 70% year over year, marking ten straight quarters of accelerating growth rather than the usual S-curve fade you see in most maturing software names. Billings increased about 91% year over year, showing that invoicing is running well ahead of recognized revenue and that demand is not a one-quarter spike. Remaining performance obligations jumped about 143%, with both short-term and long-term RPO expanding sharply, which locks in multi-year visibility on future revenue streams. Net dollar retention was about 139%, meaning existing customers on average expanded spend by close to 40% within a year. All of that fed into a Q4 Rule-of-40 score around 127%, with growth and adjusted operating margin combining to a number that most large-cap names will never see. This is not a business scraping out mid-teens growth; it is still in a hyper-growth phase on a 300+ billion USD market cap base.

Government Segment: Defense Supercycle And Long-Duration Cash Flows

Government revenue remains the larger pillar for Palantir Stock (NASDAQ:PLTR), and it continues to expand at high speed. In Q4, public-sector revenue reached roughly 730 million USD, up about 60% year over year. This is driven by defense, intelligence, and national-security workloads that are now in structural expansion, not a temporary bump. Global military expenditure recently set a record near 2.7 trillion USD, up about 9.4% year over year, which outpaced both global GDP and inflation. The United States, China and Russia together account for more than half of that total. Policy signals are clear: the current U.S. administration has floated raising the 2027 defense budget to around 1.5 trillion USD from the previously expected 1 trillion USD range, which would be close to a 50% step-up. India plans defense spending increases in the mid-teens percent area; major European countries, Russia and others are all moving higher as they modernize forces and react to geopolitical tension.
Palantir sits directly in the digital command-and-control and analytics layer of that spending. Once its platforms are wired into defense and intelligence workflows, they effectively become part of the mission infrastructure. Replacing them is expensive, risky and politically complicated. That is what converts large government deals into long-duration, highly recurring cash flows rather than one-off projects. The market’s tendency to treat Palantir as “just another expensive software name” understates how different a long-cycle defense platform is from a commoditized SaaS tool.

Commercial Engine: Healthcare, Aerospace And AIP Driving 80%-Plus Growth

The commercial segment is smaller in absolute revenue but grows even faster than the government side for Palantir Stock (NASDAQ:PLTR). Q4 commercial revenue was approximately 677 million USD, up about 82% year over year. U.S. commercial is the standout growth driver; 2026 guidance calls for U.S. commercial revenue to grow at least 115%, which would be an acceleration from already triple-digit growth of around 109% previously.
The value proposition is grounded in concrete operational gains. In a large health system with more than 6,600 beds and roughly 19,000 nurses and advanced practice providers, Palantir’s AIP platform cut time spent calculating bed capacity by about 75%. Daily transfer admissions increased by more than 10%. Time efficiency in assigning beds improved by roughly 20%. Emergency-department hold times dropped by around one hour per patient. Those are hard, measurable improvements that convert directly into revenue, cost savings, or both for the client.
In aerospace, Palantir’s software coordinates production of wide-body aircraft that contain roughly 5 million parts, built across multiple plants and several countries. Before Palantir, the manufacturer relied on fragmented systems for schedules, crew shifts, deliveries, and quality data. By integrating those inputs into a single interface, Palantir enabled planners to see shortages and bottlenecks before they hit the line, and the result was an acceleration of A350 deliveries by roughly 33%. That kind of throughput gain explains why clients renew and expand multi-year contracts rather than shopping around for cheaper tools.

Profitability, Cash Generation And The Real Earnings Power Behind Palantir Stock (NASDAQ:PLTR)

On the margin side, Palantir Stock (NASDAQ:PLTR) is already operating at a level that many peers only project on slide decks. Q4 gross margin was close to 85%, reflecting a pure software model with significant pricing power. Adjusted operating income reached about 575 million USD, with an adjusted operating margin around 57%, up roughly 12 percentage points year over year. Reported operating margin in the low-40s still reflects meaningful stock-based compensation, but even on that basis the business is highly profitable. Adjusted EPS printed near 0.25 USD, up about 79% year over year and ahead of expectations by roughly 0.02 USD.
The cash-flow profile is even stronger than the income statement suggests. Q4 net income was about 608 million USD. Cash flow from operations reached around 773 million USD. Capital expenditure stood at roughly 13.3 million USD, which is less than 2% of CFO. That left free cash flow of about 760 million USD, meaning FCF was roughly 1.25 times reported net income. Over recent years, free cash flow has consistently run about 60% or more above net income on average. That gap tells you that traditional earnings-based valuation multiples overstate how expensive the business really is on an owner’s-earnings basis.

Guidance, Growth Outlook And Margin Expansion For Palantir Stock (NASDAQ:PLTR)

Management’s 2026 outlook for Palantir Stock (NASDAQ:PLTR) is not conservative. Revenue is guided to grow about 61% year over year at the midpoint, which is an acceleration from roughly 56% growth in 2025. U.S. commercial revenue is expected to grow at least 115%, again accelerating from around 109% previously. Adjusted operating income is projected to rise roughly 94% year over year. That implies meaningful incremental margin expansion on top of already strong profitability.
If the company executes close to these numbers, the Rule-of-40 score could move even higher, which would keep Palantir at the very top of large-cap software in terms of the growth-profitability balance. A business that can expand revenue at 60% or more, while growing operating income almost 100%, and doing so with minimal capital requirements, deserves a premium multiple. The question is how high that premium can be before price risk outweighs fundamentals.

Valuation Reality Check For Palantir Stock (NASDAQ:PLTR)

The valuation on Palantir Stock (NASDAQ:PLTR) is still demanding even after the sell-off. The tech sector overall trades near 28x forward earnings. The S&P 500 is around the mid-20s. Palantir is near 98x forward earnings and around 150x on a blended trailing EPS basis. That is extreme on the surface.
Take a three-year view. Consensus paths around the name currently imply EPS growth close to 76% in 2026, followed by roughly 38% in 2027 and 38% again in 2028. Even if the share price did nothing for 36 months, the P/E multiple on 2028 earnings would still be above 50x. That is the cost of buying into a name this far out on the growth curve. However, if you look at free cash flow instead of accounting earnings, the true multiple on cash earnings is materially lower because free cash flow consistently exceeds net income. When you factor in the defense contract duration and the stickiness of industrial and healthcare deployments, the premium stops looking absurd and starts looking like an aggressive but coherent price for a rare asset.

Software Sell-Off, AI Fears And Why Palantir Stock (NASDAQ:PLTR) Is Different

The recent drawdown is tied to a broader software de-rating as markets price in the risk that AI tools let companies build internal solutions instead of paying high subscription fees for third-party platforms. Workflow and task-management vendors have been hit hardest. Palantir Stock (NASDAQ:PLTR) has been pulled into the same trade, even though its role is fundamentally different.
The easy problem is cobbling together simple apps with AI code assistants. The hard problem is building a full digital operating layer that links thousands of systems, millions of data points and real-world assets like aircraft, hospital capacity, supply chains, border control and combat operations. This is where Palantir earns its fee. Internal teams can use generic AI tools to build dashboards, but they are not going to rebuild a battle-tested, data-fused operational nervous system cheaply or quickly. That distinction is exactly what the market is missing when it reflexively sells PLTR alongside low-moat SaaS names.

Options Structures Around Palantir Stock (NASDAQ:PLTR): Getting Paid To Wait

Because the multiple is still rich, some sophisticated capital prefers option structures over direct share purchases in Palantir Stock (NASDAQ:PLTR). One concrete example is selling cash-secured puts with a strike deep below spot. The June 18 put at 95 USD is a clear case. That strike sits roughly 30% below the current 134–135 USD trading range. Premiums around 4.25 USD per contract translate into about 425 USD collected per put, which is a 4.7% gross return in roughly 113 days. With margin requirements near 9,075 USD for that position, the annualized yield is approximately 15%.
If Palantir closes above 95 USD at expiration, the put expires worthless and the seller keeps the full premium, effectively earning mid-teens annualized yield on idle cash. If the stock drops below 95 USD, the seller is assigned and ends up long PLTR around 90.75 USD effective entry after premium, which is a significantly better basis than buying at current levels. The risk is clear: if Palantir collapses, downside is large. But for capital that wants exposure to Palantir Stock (NASDAQ:PLTR) on a multi-year horizon and demands a wider margin of safety than 134–135 USD, being paid to wait for a potential entry point in the 90s is a disciplined way to express a constructive long-term view.

Key Risks To The Palantir Stock (NASDAQ:PLTR) Thesis

Several risk lines need to be kept in focus for Palantir Stock (NASDAQ:PLTR). First, valuation risk is real. If growth slows faster than expected or margins stall, the stock can suffer a violent multiple compression. A drop from near 100x forward earnings to even 50x would cut the share price sharply even if revenue continues to rise. Second, factor flows can overwhelm fundamentals in the short term. If the market keeps unwinding crowded AI and software trades, Palantir will likely trade with the group regardless of its individual execution.
Third, political and reputational risk is baked into the model. Palantir’s software has been involved in controversial government programs, from immigration enforcement to foreign operations against hostile regimes. That will deter some potential clients and can create headline shocks that pressure the multiple. Finally, concentration in defense and government budgets, while a strength in the current environment, becomes a vulnerability if global politics shift toward spending restraint or if policy priorities pivot away from Palantir’s core domains.

Palantir Stock (NASDAQ:PLTR): Clear Verdict At Current Levels

Taking the numbers together, Palantir Stock (NASDAQ:PLTR) at roughly 134–135 USD offers an unusual combination: revenue growth near 70% year over year, commercial growth above 80%, government growth around 60%, free cash flow already outrunning net income by more than 20%, adjusted operating margins around the mid-50s, a Rule-of-40 score in the 120%+ range, and multi-year visibility off a 143% surge in remaining performance obligations. The price is high, but the underlying machine is exceptional.
With the multiple already compressed from extremes above 150x to under 100x forward earnings, and with a structural defense and AI infrastructure tailwind behind it, Palantir Stock (NASDAQ:PLTR) justifies a firm Buy stance for capital that can tolerate volatility and is willing to own a premium-priced compounder for years. For more price-sensitive capital, using deep out-of-the-money puts to target an effective entry in the 90s is a rational way to extract double-digit yields while waiting. Either way, the direction is clear: Palantir is not a neutral hold at these levels; it is a high-conviction growth name that still deserves capital, with the understanding that the ride will not be smooth.

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