Gotrade News - UBS has officially upgraded Palantir Technologies (PLTR) from Neutral to Buy after the stock got hammered, dropping roughly 35% from its all-time high. Shares bounced 1.4% in after-hours trading on Thursday (26/02), signaling early investor appetite following the call.
UBS analyst Karl Keirstead sees the pullback as a solid entry point into what he calls the top growth story in software right now. He pointed to Palantir sitting right at the sweet spot of two massive spending waves, AI and data.
Key Takeaways
- UBS upgrades Palantir to Buy, calling its 50x 2027 FCF valuation attractive after the 35% dip
- The company is projected to deliver 70% revenue growth in 2026 with margins holding steady in the mid-50s
- AI and data demand for Palantir's offerings remains exceptional despite growing competition
In a note sent to clients, Keirstead projected Palantir's revenue to grow 70% in 2026 with margins staying stable in the mid-50% range. At 50 times his 2027 free cash flow estimates, he argued that Palantir's current price tag looks very compelling.
Worth noting though, Keirstead kept his price target unchanged at $180 despite the upgrade. That suggests the call is more about the valuation window opened up by the sell-off than any major shift in fundamental outlook.
AI Demand Is Firing on All Cylinders
A big chunk of Keirstead's bull case rests on Palantir being a clear-cut winner in the AI spending boom. His latest channel checks paint a picture of demand that's not just strong but accelerating.
According to Seeking Alpha, one of Palantir's partners described current demand as "exceptional." The ramp-up in AI model investment and data infrastructure spending is happening right now, and Palantir is sitting right in the middle of it.
That said, Keirstead acknowledged the elephant in the room, whether 50%-plus growth is sustainable long-term. The key question is whether competitors like Databricks, the hyperscalers, OpenAI, and Anthropic will start eating into Palantir's turf.
Still Pricey, but a Lot More Digestible
According to data from GuruFocus, Palantir's P/E ratio currently sits at 215.78, hovering near its one-year low. Meanwhile, the RSI reading of 39.69 suggests the stock is creeping toward oversold territory.
On the financial health front, Palantir posted trailing twelve-month revenue of $4.48 billion with a net margin of 36.31%. Its debt-to-equity ratio stands at just 0.03, pointing to a rock-solid balance sheet with minimal leverage.
There are a few yellow flags to keep an eye on, however. GuruFocus flagged a Sloan Ratio that hints at lower earnings quality, along with notable insider selling activity that could raise some eyebrows.
With a beta of 1.86, Palantir runs hotter than the broader market in terms of volatility. The UBS upgrade is a bullish signal, but investors should still weigh the full risk profile before jumping in.
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Reference:
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Seeking Alpha, Palantir upgraded by UBS after recent sell-off. Accessed on February 27, 2026
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GuruFocus, Palantir Technologies (PLTR) Upgraded to Buy by UBS. Accessed on February 27, 2026
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