For years, Wolfe Research maintained a long-standing avoidance strategy on Palantir (PLTR), keeping a bearish “Underperform” rating on the stock due to concerns over its steep valuation multiples.
On Tuesday, June 16, that changed, though not by much.
Wolfe analysts Alex Zukin and Joshua Tilton lifted their rating on Palantir (PLTR) to Peer Perform from Underperform, ending a long stretch of bearishness on the data and artificial intelligence software company.
The move sounds bullish on its face. Zukin called Palantir the most applied enterprise AI software company on the market today, with growth rates that outpace its peers.
But Wolfe stopped short of an outright buy call, and the firm did not attach a new price target to the upgrade.
Wolfe drops its Palantir sell call but won’t call it a buy
Zukin’s note framed the shift bluntly: Palantir is not “too big to fail,” he wrote, but it has become “too big to ignore,” according to Barchart.
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That distinction explains the rating. Wolfe sees enough strength in the business to stop betting against the stock, but not enough comfort with its valuation to recommend buying more.
Ontology, Palantir’s proprietary database layer linking AI outputs to real business decisions inside its Foundry and Gotham software, is the centerpiece of Zukin’s case.
He called it the company’s secret sauce and said Ontology bookings have picked up speed in 2026, according to Investing.com.
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Why valuation, not growth, keeps Palantir’s rating capped at hold
Wolfe’s numbers explain the hesitation.
Palantir’s revenue is projected to grow 39% annually through 2029 in Wolfe’s base case, climbing to 55% in a bullish scenario, Yahoo Finance reports.
Those are rare numbers for software.
The catch, Wolfe says, is that the stock already prices in years of that growth, making it the most expensive name in software.
Wall Street remains split.
Bank of America’s Mariana Perez Mora holds the Street-high target at $255, and UBS analyst Karl Keirstead backs $200, MoneyCheck reported.
Jefferies analyst Brent Thill holds the Street-low target at $70, calling the stock’s 31 times projected 2027 enterprise value to revenue unsustainable, according to TipRanks.
HSBC sits in between, downgrading Palantir to hold in May over rising AI competition, CNBC reported.
What Tuesday’s reaction tells investors about Palantir stock now
Palantir shares fell 2% on Tuesday to $131.94, even with the upgrade in hand.
That left the stock down 26% for 2026 and 16% in June alone, a sharp contrast with the S&P 500’s 10% year-to-date gain and the Nasdaq’s roughly 14% advance.
Related: Palantir CEO issues blunt warning to ‘AI slop’ competitors
The stock has since stabilized, trading near $134.42 Wednesday morning, up nearly 1% on the day and more than 4% over the prior five sessions.
Zukin’s track record adds context:
He has a 60% success rate and 17.3% average return on past calls, according to TipRanks at the time of writing, mostly from covering Salesforce, Microsoft, and Workday, not Palantir.
The takeaway:
Traders shrugged off Tuesday’s hold rating like a footnote, not the catalyst a buy call would have been.
What needs to happen before Wolfe upgrades Palantir again
Palantir’s next earnings report lands August 3, when management is expected to guide toward roughly 80% revenue growth, a slight step down from the first quarter’s 85% pace that beat Wall Street estimates by nearly 6%, according to the company’s SEC filing.
Investors weighing whether to add to a position have a few concrete signals to track between now and then.
Three signals that could push Wolfe toward a buy rating
- Ontology backlog growth: Zukin flagged accelerating Ontology bookings as the clearest sign the platform is becoming harder for enterprises to rip out.
- Insider buying, not just selling: CEO Alex Karp sold shares under a preset trading plan in May, and no Palantir executive has bought stock on the open market this year.
- A narrower valuation gap: Shares trade near 151 times earnings, so any pullback that brings the multiple closer to the broader software group could ease Wolfe’s main objection.
For readers already holding Palantir, Wolfe’s move is a vote of confidence in the business, not the stock price.
For those on the sidelines, a hold rating from a former bear is a signal to keep watching, not a reason to buy at current levels.
Related: Palantir flashes a warning signal Wall Street can’t ignore
