Goldman Sachs analyst revisits Palantir Technologies stock price target

Palantir shares are up 20% for the year, but have fallen 27% from their mid-February peak.

Mar 28, 2025 - 11:55

Goldman Sachs analyst revisits Palantir Technologies stock price target

Palantir Technologies shares moved lower in early Friday trading amid questions over the pace of AI investment, tied in part to CoreWeave's shaky IPO, and a note from Goldman Sachs that questions developments in its core technology.

Palantir (PLTR) uses its artificial intelligence platform, known as AIP, to help clients pull together disparate collections of data into a single model that they then can build, train and deploy in their day-to-day processes.

Palantir also touts the benefits of its ontology offering, a framework that helps represent and connect real-world entities, data, and processes for its commercial clients.

Last month, the Denver-based group, which was founded by the tech investors Peter Thiel and Joe Lonsdale, posted stronger-than-expected fourth quarter earnings of 14 cents per share, with revenues rising 36% from the year-earlier period to $827.5 million, thanks in part to a surge in demand for AI-related products offered by its commercial business.

Palantir forecast 2025 revenue in the region of $3.75 billion, firmly ahead of the LSEG estimate. Commercial revenue is likely to rise 54% from 2024 to $1.08 billion.

Palantir shares are up 20% for the year, but have fallen 27% from their mid-February peak.

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The stock has performed incredibly well as a result, rising 143% over the past six months, with a near eight-fold gain over the past five years, as investors rush to early adopters in the AI space.

Its valuation, however, has expanded sharply as well, raising questions over the sustainability of its stock performance given that its trades at a 477x multiple to forward earnings, compared to around 38x for Nvidia (NVDA) and 32x for Microsoft (MSFT) .

Investors have also been spooked by comments from Defense Secretary Peter Hegseth, who has vowed to take around 8%, or $290 billion, out of the Pentagon budget over the next five years, a move that could affect one of Palantir's crucial revenue sources.

The U.S. Department of Defense for around 17% of Palantir's overall revenue in 2024, and around 18% in 2023, according to its annual report.

That's left the stock down nearly 27% since its all-time peak in mid-February.

Investors are also tracking developments in CoreWeave's Friday listing on the Nasdaq, after the Nvidia-backed cloud services group slashed its IPO price and lowered its valuation by around 35%, to $23 billion, amid questions over the pace of AI demand.

Goldman Sachs analyst Gabriela Borges noted both the heady valuation and the group's ontology offering in reiterating her $180 price target and 'neutral' rating on Palantir in a note published Friday.

In order to utilize AI, organizations need to structure and contextualize their data in a way that's accurate and operationally relevant, to enable custom workflows to reason through key business questions," Borges said.

"Palantir’s ontology has enabled data stitching and custom workflows since its early days, and with increased enterprise focus on AI, the company has emerged as platform capable of delivering fast time to value and tangible [return on investment]," she added.

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The analyst noted, however, that 'its core technical competencies have not fundamentally changed over the past year ... rather, the market has increasingly seen the value of an operation-centric data platform as enterprises look to embed AI applications."

"Our positive view of Palantir’s differentiated technology is balanced by our limited visibility into whether building custom AI workflows will become easier as the tech ecosystem matures," she added.

Palantir shares were last marked 0.75% lower in premarket trading to indicate an opening bell price of $89.41 each.