Key Takeaways
- Dan Ives from Wedbush named Palantir his premier software selection beyond the Magnificent Seven, characterizing Q4 performance as “stunning”
- The analyst believes the AI transformation remains in its “third inning,” with U.S. government spending potentially scaling to trillions
- Approximately $20M in revenue transitioned from commercial to government classification, which Ives characterized as an anomaly affecting commercial figures
- Despite dropping over 17% year-to-date in 2026, PLTR trades beneath its five-year historical average across multiple valuation metrics, showing a forward P/E of 132x
- Analyst consensus reaches “Moderate Buy” territory with an average target price of $195.04, suggesting approximately 32% appreciation potential
Wedbush analyst Dan Ives made a compelling appearance on CNBC, expressing strong conviction about Palantir as his preferred software investment outside the Magnificent Seven. He emphasized that the artificial intelligence market remains far from maturity.
Palantir Technologies Inc., PLTR
Utilizing a baseball metaphor, Ives countered growing market concerns about an AI bubble by asserting we’re merely in the “third inning” of this technological transformation. His perspective: the AI revolution is gaining momentum rather than approaching exhaustion.
While PLTR has declined more than 17% since the start of 2026, Ives characterized the company’s latest quarterly performance as “stunning” and positioned Palantir in “a whole other category” relative to competing software enterprises.
The shares have retreated from elevated valuations, currently trading beneath their five-year historical averages across several key metrics. However, 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 expansion. U.S. revenue specifically reached $1.08 billion, climbing 93% compared to the prior-year period.
Full fiscal year 2025 revenue totaled $4.475 billion, marking 56% year-over-year growth. GAAP earnings per share for Q4 registered at $0.24, with full-year GAAP EPS reaching $0.63.
Understanding the Commercial Revenue Concerns
A criticism directed at Palantir’s recent quarter centered on commercial revenue underperforming analyst expectations. Ives quickly addressed this concern — approximately $20 million shifted from commercial classification to government due to a single contract reclassification.
He characterized this as an accounting adjustment rather than fundamental weakness. According to Ives, government-sector AI demand represents the narrative investors should prioritize.
Ives labeled U.S. government AI expenditure “the golden goose.” He projected contracts could accumulate to hundreds of billions, with extended-term possibilities extending into the trillions.
“For numerous software enterprises, government revenue streams could potentially double within the next two to three years,” Ives stated during his CNBC appearance.
Cybersecurity Opportunities and Agentic AI Transformation
Ives also highlighted cybersecurity as a significant beneficiary of AI infrastructure expansion. He projected security budgets could increase 50% as agentic AI creates more sophisticated threat environments.
He characterized this dynamic as “the most connected trade” he had witnessed — indicating the AI infrastructure expansion and corresponding security investment requirements are intrinsically intertwined.
Regarding regulatory oversight, Ives expressed doubt that regulation would substantially impede industry progress. He observed that technological advancement was outpacing any regulatory framework’s ability to respond effectively.
Palantir’s forward outlook projected Q1 2026 revenue between $1.532–$1.536 billion. Full-year 2026 revenue guidance sits in the $7.182–$7.198 billion range.
U.S. commercial revenue specifically is forecast to exceed $3.144 billion for the complete year.
Rosenblatt Securities maintained a Buy rating on PLTR with a $200 price objective on April 24. Mizuho preserved its Outperform rating while reducing its target from $195 down to $185.
According to 28 analysts tracked, the consensus rating stands at “Moderate Buy” with an average price target of $195.04 — approximately 32% above present trading levels.
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