Deutsche Bank upgraded Palantir to Buy from Hold after calling its second-quarter results "exceptional," maintaining a $200 price target that implies 59% upside. The move follows a quarter in which Palantir's revenue grew 93% year over year and its US commercial business jumped 149%, while the company also raised its full-year guidance.
Deutsche Bank upgraded Palantir to Buy from Hold in a note on Tuesday, arguing the software maker is turning AI demand into customer value well ahead of the rest of the sector. Analyst Brad Zelnick maintained a $200 price target on the stock, implying 59% upside.
That view followed Palantir's second-quarter report, published after Monday's close, which showed revenue climbing 93% year over year to $1.935 billion, above analyst estimates of $1.812 billion. Adjusted earnings per share rose 156% to 41 cents, also beating the 34-cent estimate.
US commercial demand reaccelerates
The bank noted growth accelerated eight percentage points from the prior quarter, led by the US commercial segment, where revenue jumped 149%. That segment posted record total contract value of $2.132 billion, up 153%.
Palantir also lifted its full-year outlook, raising projected 2026 revenue to a range of $8.150 billion to $8.158 billion from an earlier forecast of $7.650 billion to $7.662 billion. The company also increased its US commercial sales growth guidance from 120% to 134%.
Zelnick likens Palantir to a "time traveler"
According to Deutsche Bank analyst Brad Zelnick: "a time traveler, having already arrived in the AI future others are still aspiring towards." The firm added that Palantir's financial profile is separating further from the broader software group, supporting a premium valuation, with shares trading at about 1.5 times its fiscal 2027 estimate on one metric.
Stock jumps after a 30% year-to-date drop
Palantir stock surged more than 16% to 146.33 in early trading Tuesday. Shares had retreated 30% in 2026 heading into the report. They had gained 135% last year, 340% in 2024 and 167% in 2023.
The rally also reset Palantir's stock valuation. Per Yahoo Finance AlphaSpace data, its forward price-to-earnings ratio fell to 84.03 times, down from a four-quarter average of about 199 times. That compares with a forward P/E of about 20 times for the S&P 500.
Sources: Investing.com, Investor's Business Daily, Yahoo Finance
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