NEW YORK, Jan 11, 2026, 04:19 EST
- “Five-star” investor describes the recent dip as profit-taking rather than a sign of weakening fundamentals
- Truist kicked off coverage this week, assigning a Buy rating and setting a price target at $223
- Wall Street remains cautious overall, holding a consensus rating of Hold and an average price target of $190
Palantir Technologies’ rally is hitting a familiar snag: the stock price. Billy Duberstein, a “five-star” investor, said it’s “too early to call” whether the recent slump—shares have dropped about 14% since the November third-quarter report—signals a cooling off. He described the valuation as “frothy” but noted, “The seemingly insane valuation might not be as crazy as it seems if Palantir can continue to deliver the blockbuster growth it did in 2025.” Duberstein added, “Only time will tell if the AI revolution can continue propelling Palantir to new heights, or if the company’s growth will inevitably stall out.” 1
The timing is crucial as investors aim to separate genuine winners from hype heading into 2026, with Palantir now serving as a litmus test for how much the market will value fast-growing AI-related software. The stock’s recent swings have raised the stakes—when expectations run this high, even minor shortfalls can appear significant.
Truist Securities kicked off coverage on Tuesday with a Buy rating and set a $223 price target, highlighting Palantir’s potential to boost adoption of “generative AI” — tech that creates text, code, or images from prompts — in both government and enterprise sectors. The firm noted a sharp 63% year-on-year growth and operating margins topping 50%, dubbing Palantir a “best-in-class AI asset,” per Investing.com. 2
Shares climbed roughly 0.3%, reaching $177.49.
Palantir’s Artificial Intelligence Platform, or AIP, lies at the heart of its sales pitch. The company markets it as a tool to integrate AI into a client’s data and workflows, all while maintaining tight control over access permissions. Simply put, Palantir is betting that companies already trusting it with sensitive information will turn to it once more as they aim to deploy AI securely.
The race is heating up. Accenture announced this week it plans to acquire U.K.-based AI company Faculty, a direct competitor to Palantir, and will appoint Faculty CEO Marc Warner as its new chief technology officer. This move signals that major service providers continue to invest heavily in AI talent and technology. 3
Software hasn’t caught a break amid the wider market currents. Traders jump from AI chip stocks one week to applications the next, and Palantir finds itself on the software end of that pendulum.
The downside is clear-cut: growth falters, margins plateau, or major deals fall through, leaving a premium valuation with little support. If investors shift their preference to picks-and-shovels chipmakers over software layers, Palantir’s stock could remain volatile despite positive ratings.
