Palantir Raises Guidance as BofA Lifts Price Target on Q1 Earnings Beat

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•  05 May 2026
 

$PLTR Palantir Technologies posted first-quarter 2026 revenue of $1.632 billion, up 85% year-over-year, delivering a Rule of 40 score of 145%, the highest in the sector and a clear signal of accelerating earnings momentum. Bank of America reiterated its Buy rating, raised earnings estimates across all forecast years, and maintained a $255 price target, implying roughly 82% upside from current levels. Despite the beat, the stock fell 6% as the market weighed valuation concerns against the fundamental step-change in the business.

The US Government segment was the standout catalyst, generating $687 million in quarterly revenue, up 84%, driven by a fourfold annual increase in usage of the Maven Smart System. The President's 2027 budget request includes $2.3 billion allocated to Maven and the Joint Fires Network over five years, with both programs now holding "program of record" status within the Pentagon, a designation that makes cancellation significantly harder. ShipOS has accumulated $366 million in commitments to date, and TITAN has entered the production phase.

Free cash flow is on track to reach $4.2 billion for the full year, nearly doubling the $2.1 billion generated in 2025 and quadrupling the $1.1 billion from 2024. Bank of America raised its 2026 revenue forecast to $7.85 billion with adjusted EPS of $1.47, projecting revenues of $11.2 billion in 2027 and $15.2 billion in 2028. Operating margins are expected to climb to 41% in 2026, with the balance sheet carrying zero debt and $5.7 billion in projected year-end cash, a setup that supports multiple expansion over a longer horizon.

Palantir is explicitly positioning against what it calls AI slop, the deployment of artificial intelligence without governance, infrastructure, or integration with existing systems. Bank of America frames the relationship with OpenAI, Anthropic, and Meta as complementary rather than competitive, arguing that as foundation models improve, Palantir's AIP, Ontology, Foundry, and Apollo platforms become more valuable, not less. This structural argument underpins the bank's decision to use a 2035 EBITDA multiple of 14x, implying $47.5 billion in EBITDA, to derive the $255 target rather than near-term multiples. The stock currently trades at roughly 99x 2026 adjusted earnings and 70.8x EV/EBITDA, with institutional flows likely to remain sensitive to any deterioration in commercial segment execution.

The next key condition to watch is commercial segment performance: after-hours weakness was attributed specifically to commercial metrics coming in slightly below expectations, and any sustained deceleration there would challenge the long-term compounding thesis Bank of America is underwriting at current levels.

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