Key Moments
- UBS upgraded Palantir to Buy from Neutral after a -35% pullback from its peak share price.
- The bank now values Palantir at 50x its 2027 FCF estimates, underpinned by projected 70% revenue growth in 2026 and mid-50% margins.
- UBS kept its $180 price target, citing strong AI-driven demand, a roughly 54% revenue CAGR outlook through 2028, and stable 55%-60% non-GAAP margins.
UBS Shifts to Bullish Stance on Palantir
Investing.com — UBS has raised its rating on Palantir to Buy from Neutral, saying the recent selloff in the stock has opened an appealing entry point. The bank highlighted that the U.S. technology company’s shares are trading 35% below their peak level.
Analysts led by Karl Keirstead wrote that they “recommend that investors take advantage of this -35% move off the peak for the premier growth story in software and a company that is at the nexus of the two most powerful spending trends – AI and Data.”
Growth, Margins, and Valuation Framework
UBS laid out a valuation case anchored in rapid growth and robust profitability. The analysts stated that “at 50x our 2027 FCF estimates, Palantir shares are now very attractive given our estimate for 70% revs growth in 2026 and stable mid-50% margins.”
The bank now projects a roughly 54% compound annual revenue growth rate over the next three years through 2028 and expects non-GAAP margins to stay within a 55%-60% band. UBS also pointed to Palantir’s recent performance, noting that the company delivered 70% revenue growth in the fourth quarter of 2025.
| Metric / Assumption | UBS View |
|---|---|
| Rating | Upgraded to Buy from Neutral |
| Share price move from peak | -35% |
| 2027 FCF valuation multiple | 50x |
| Estimated revenue growth (2026) | 70% |
| Recent revenue growth (Q4 2025) | 70% |
| Modeled revenue CAGR through 2028 | About 54% |
| Expected non-GAAP margin range | 55%-60% |
| Prior 2025 revenue multiple | 49x |
| Prior 2025 FCF multiple | 124x |
| Price target | $180 |
Demand Signals and Competitive Landscape
UBS’s more optimistic stance is also tied to what it describes as ongoing strong demand indicators. After conducting checks with partners and customers, the analysts concluded that Palantir is operating in a constructive environment as enterprises speed up adoption of artificial intelligence solutions.
According to UBS, one partner characterized current conditions succinctly, saying “demand is exceptional.”
The analysts acknowledged that many investors are focused on whether Palantir can sustain growth above 50% and how competition from hyperscalers, Databricks, or AI model providers might evolve. However, they said their most recent work did not reveal “any material emerging competition.”
Reassessing Valuation After Multiple Compression
UBS explained that its previous caution was driven by what it viewed as stretched valuation levels. At that time, the stock was trading at 49x revenue and 124x free cash flow based on 2025 projections. Following the pullback in the share price and higher forecasts, the bank said Palantir’s multiples have fallen significantly.
The analysts wrote: “If one assumes that Palantir can grow at a ~50% CAGR for the next 3 years, then the next-year FCF multiple is now down to 1x the projected growth rate. This we believe is finally at a level that many investors can make a strong valuation case for the stock.”
Price Target and Longer-Term AI Narrative
UBS reiterated its $180 price target on Palantir. The bank argued that software companies with accelerating growth trends have historically tended to outperform, and it believes Palantir warrants a premium valuation because of its positioning in AI, data platforms, and modern defense technology.
The analysts concluded with a view on investor behavior, stating, “In our view, it is very likely that investors come back to “AI winner” stocks such as Palantir in 2026.”
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