Palantir Looks Cheap Among AI Software Stocks, UBS Says — Why PLTR Could Have More Room To Run

• UBS raised its price target for Palantir, while maintaining a ‘Buy’ rating.
• The brokerage believes Palantir deserves a premium for its exposure to AI, data, and modern defense technology.
• 20 of 31 analysts tracked by Koyfin rate PLTR ‘Buy’ or ‘Strong Buy.’

Palantir Technologies (PLTR) looks relatively cheap compared with AI-linked software peers, according to UBS, which expects the stock to rebound as demand for its artificial intelligence-linked software services gains traction.

At the time of writing on Tuesday afternoon, PLTR stock was trading nearly 1.7% higher.

UBS Raises PLTR Price Target

UBS reiterated a ‘Buy’ rating on Palantir and raised its price target to $250 from $220, implying 44% upside from Monday’s close.

“Last week we attended Palantir’s AIPCon customer/leadership event … our view of Palantir as the best AI enabler in the market (making frontier models/AI useful in large enterprises) was if anything bolstered by these conversations [with Palantir executives and customers], and demand momentum seems robust,” the UBS analyst wrote in a report on Tuesday, according to a report in CNBC.

Palantir provides AI-integrated software platforms to clients including the Department of Defense, enabling users to analyze massive data sets.

Valuation Looks Attractive

PLTR stock now trades at 51 times expected free cash flow for 2027, despite Palantir having “the highest growth and margin profiles across software,” according to UBS.

At current prices, the stock is particularly attractive versus peers such as Snowflake and CrowdStrike, UBS wrote, as reported by CNBC.

The brokerage said the “valuation discount derives largely from investor concerns about a near-term growth rate peak and the potential that the model providers begin to target the data software layer.”

“Palantir deserves a material multiple premium given its leading position in three key growth areas – AI, data and modern defense tech, making it a relatively cheap stock,” the brokerage wrote.

PLTR Stock: Stocktwits Retail Sentiment

On Stocktwits, retail sentiment for PLTR was ‘bearish,’ unchanged in the past 24 hours, while message volume remained ‘normal’ during the same period.

The UBS call matches the consensus on Wall Street. According to data from Koyfin, 20 of the 31 analysts covering PLTR rate it ‘Buy’ and ‘Strong Buy,’ while nine rate it ‘Hold’ and one each rate it ‘Sell’ and ‘Strong Sell.’

The 12-month average price target on the stock is $195.57, representing potential upside of nearly 13% from Monday’s close.

PLTR shares have declined nearly 7% year to date. 

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