Key Takeaways:
- Sovereign AI Demand: Palantir’s U.S. revenue grew 115% in Q2 as companies look to own their AI.
- Price Projection: Based on current execution, PLTR stock could reach $529 by December 2028.
- Potential Gains: This target implies a total return of 169% from the current price of $196.75.
- Annual Return: Investors could see roughly 57% growth per year over the next 2.2 years.
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Palantir Technologies (PLTR) just posted its strongest quarter ever. Q2 revenue rose 93% to $1.94 billion, and the company also raised its full-year revenue guidance to about $8.15 billion, which implies 82% growth.
The U.S. business is doing the heavy lifting. It now makes up over 81% of total revenue. U.S. commercial revenue jumped 149%, while U.S. government revenue grew 90%.
Customers are signing bigger deals. Palantir closed 220 deals worth $1 million or more, and net dollar retention reached 157%, which means existing customers are spending much more.
The company is also very profitable. It generated $1.22 billion in adjusted free cash flow, a 63% margin.
Management says the demand comes from “sovereign AI.” Companies want to own their data, logic, and model weights instead of handing them to outside AI labs.
CEO Alex Karp said he wants to keep this growth pace for the next 18 months.
Yet the stock has gained just 9% over the past year. At $196.75, investors may still be getting a discount.
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What the Model Says for Palantir Stock
We looked at Palantir as it moves from a government contractor to a broad AI platform.
Our model uses 58.5% annual revenue growth, 57.5% operating margins, and a 103.4x P/E multiple. Together, these point to a share price of $528.51 by December 31, 2028.
The P/E multiple sits below Palantir’s recent averages of 122.7x over one year and 102.6x over three years. So the model does not rely on investors paying more for each dollar of earnings.
Our Valuation Assumptions
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Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for PLTR stock:
1. Revenue Growth: 58.5%
Palantir grew revenue 56.2% in 2025, and the three-year and five-year paces were closer to 33%.
Our number sits near the recent run rate, as Q2 growth was even faster at 93%.
Large customers are spending more, too. Revenue from the top 20 customers rose 67% to $124 million per customer. Total remaining deal value hit $13.1 billion, up 83%.
2. Operating margins: 57.5%
Palantir’s operating margin was 50.4% over the last twelve months, and the three-year average was 39.4%.
The company’s adjusted operating margin reached 62% in Q2. We assume a slightly lower average to allow for higher costs.
Management expects expenses to rise in Q3 as new hires start and also plans to keep investing in AI talent and products.
3. Exit P/E Multiple: 103.4x
The stock trades at 103.4x forward earnings today. We assume the multiple holds there rather than expanding.
That is close to the five-year average of 102.5x, well below the 10-year average of 114x.
Palantir’s earnings should grow quickly. The company also holds $9.2 billion in cash and short-term Treasuries. That gives it room to invest without raising money.
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What Happens If Things Go Better or Worse?
Palantir’s valuation depends on growth lasting. Here’s how the stock might perform under different scenarios through December 2030:
- Low Case: If revenue growth slows to 52.1% and net income margins land at 45.3%, investors still see a 375.8% total return (45.1% annually). That implies a price of $936.15.
- Mid Case: With 57.9% growth and 48.6% margins, we expect a total return of 612.3% (59.7% annually). That implies a price of $1,401.47.
- High Case: If growth reaches 63.7% and margins hold at 51.1%, returns could hit 928.0% total (74.4% annually). That implies a price of $2,022.65.
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The range reflects how long the AI deal boom lasts.
In the low case, customers slow their spending or growth outside the U.S. stays modest. International commercial revenue grew just 26% in Q2.
In the high case, sovereign AI spreads across more industries. Palantir then keeps converting pilots into multi-year contracts at today’s pace.
How Much Upside Does Palantir Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
