Bank of America wasted little time in making its view on Palantir (PLTR) clear after another Q1 earnings stunner.

The bank maintained its bullish stance on the stock, arguing that Palantir’s AI endeavors are showing up in its sales, margins, contracts, and forward guidance.

Palantir has been a battleground stock for years, and bearish cases surrounding the company have drawn particular attention from investors like Michael Burry and others seeking clarity on the massive wave of AI spending.

Apart from the obvious ethical concerns tied to its software being used in war, bullish investors view Palantir as one of the few companies turning AI hype into real-world enterprise and government applications.

On the flipside, the bears worry the stock has already priced in several years of growth.

So far, Bank of America feels the bull case is a lot more compelling.

Consequently, it reiterated its Buy rating and $255 price target on the stock, hailing its Q1 results as a “step-function” print.

Additionally, BofA also bumped its 2026 sales estimate to $7.85 billion from $7.37 billion and lifted its 2026 EPS estimate to $1.47 from $1.30 as the company’s AI tools move toward real-world AI deployment.

Palantir’s U.S. business powers a blowout Q1

• Palantir Technologies turned in another Q1 report, with adjusted earnings per share of 33 cents.

• Revenue surged 84.4% year-over-year to $1.63 billion, beating analyst forecasts by a comfortable margin.

• The company’s U.S. business remained the biggest driver, with sales rising more than 50% to $1.28 billion.

• U.S. commercial sales skyrocketed 133%, while U.S. government revenue shot up 84%.

• Palantir secured 72 deals worth nearly $5 million and 47 worth at least $10 million.

• Management bumped its 2026 revenue, adjusted operating income, and free cash flow guidance.
  Source: Palantir Investor Relations.

Bank of America sees more room for Palantir to run

Bofa’s primary argument for Palantir’s bull case is that it isn’t selling AI as a loose tool.

More Palantir 

Instead it’s selling an AI-powered system helping private enterprises and the government actually utilizes inside complicated operations.

That’s huge because most businesses are now moving past basic access to large language models and toward structured AI deployments, that entail governance, context, and integration.

Those are exactly the things Palantir specializes in with AIP, Foundry, Ontology, and Apollo.

Its government business, particularly Maven, remains the crown jewel, with BofA highlighting 84% growth that underscored a sharp increase in Maven Smart System usage, including future funding tied to Maven and the Joint Fires Network.

On top of that, the commercial side also continues to impress, rising 18% on a sequential basis, supporting the bank’s view that that Palantir’s growth story is just getting started.

Palantir earnings history

Palantir has been a consistent outperformer, posting strong top-and-bottom-line beats, backed by superb year-over-year sales growth accelerating across the past four quarters.

• FQ1 2026: EPS of $0.33 beat by $0.05, while revenue of $1.63 billion beat by $90.91 million, with YoY growth of 84.71%.

• FQ4 2025: EPS of $0.25 beat by $0.02, while revenue of $1.41 billion beat by $65.44 million, with YoY growth of 70.00%.

• FQ3 2025: EPS of $0.21 beat by $0.04, while revenue of $1.18 billion beat by $89.45 million, with YoY growth of 62.79%.

• FQ2 2025: EPS of $0.16 beat by $0.02, while revenue of $1.00 billion beat by $64.23 million, with YoY growth of 48.01%.
  Source: Seeking Alpha.

Wall Street price targets for Palantir stock post earnings

• Wedbush reiterated an Outperform rating with a $230 price target.

• Rosenblatt raised its price target to $225 from $200.

• DA Davidson lowered its price target to $165 from $180.

• RBC reiterated an Underperform rating with a $90 price target.

• Oppenheimer has an Outperform rating with a $200 price target.

Risks to Palantir’s bull thesis

Bank of America feels there’s plenty to like about Palantir stock, but it still needs to clear a remarkably high bar.

The first and most obvious risk remains market growth.

Palantir needs consistently high demand for AI platforms to continue to keep the ball rolling and expand swiftly across businesses and government agencies.

Any delayed projects or a pullback in spending could result in a considerable re-rating of its top-line expectations.

The second major risk to consider is pricing power.

BofA analysts warned that faster-than-expected commoditization will hurt its thesis.

That essentially points to AI tools becoming a lot easier to copy, cheaper to buy, and harder to sell at the prices Palantir charges its customers.

Then there’s the risk from the growing competition in the AI space.

OpenAI, Anthropic, Meta, cloud companies, and enterprise software vendors continue to push deeper into AI, and if its rivals narrow the gap, the stock will lose a ton of its premium.

Speaking of premium, the stock is trading at over 101 times forward non-GAAP earnings, 321% above the sector median, according to Seeking Alpha.

Even more startling is that it’s trading at almost 48 times forward sales, which is 1,367% above the sector median.

On top of that, public sector risk is another major concern.

Government buyers have the tendency to be sluggish, political, and cautious. Specifically, BofA flagged stronger-than-expected pushback from public sector customers to commercial off-the-shelf software as a major risk.

Palantir stock returns vs the S&P 500

• Over the past week, Palantir stock fell 5.02%, while the S&P 500 rose 1.19%.

• Over the past month, it fell 8.45%, while the S&P 500 rose 10.28%.

• Over the past six months, it fell 28.75%, while the S&P 500 rose 7.20%.

• Year to date, it fell 23.54%, while the S&P 500 rose 6.04%.

• Over the past year, it rose 9.36%, while the S&P 500 rose 27.65%.

• Over the past three years, it rose 1,741.60%, while the S&P 500 rose 78.75%.
  Source: Seeking Alpha.

Related: Cathie Wood sells $11.8 million in Nvidia-backed stock before earnings

This story was originally published by TheStreet on May 6, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.