Palantir Technologies: Strong Growth Prospects Drive BUY Recommendation February 3, 2026
Company Overview
Palantir Technologies Inc is a leading US analytics software company founded in 2003 and headquartered in the United States. The company specialises in helping large organisations integrate and analyse massive datasets to enhance decision-making and operational efficiency. Palantir serves a diverse client base that includes government agencies and commercial enterprises across numerous industries worldwide, positioning itself as a critical technology partner for data-driven organizations.
Investment Highlights Drive Optimistic Outlook
Phillip Securities Research has initiated coverage of Palantir with a BUY recommendation and an ambitious target price of US$208, citing three key investment merits that support significant upside potential.
The first major growth driver is Palantir’s expansion beyond its traditional defence market into commercial sectors. The company’s proprietary Ontology platform is generating impressive momentum, driving commercial revenue growth exceeding 50% year-over-year. This expansion is primarily led by large US enterprises, with projections indicating US commercial revenue will comprise 73% of total commercial sales in FY25. Deal values have doubled year-over-year in the third quarter of 2025, demonstrating strong market demand. The company’s sector diversification has expanded from 60 industries in 2021 to 90 in 2024, significantly broadening its addressable market.
The second pillar of growth comes from stable government revenue streams anchored by entrenched US defence relationships. Government revenue is expected to surge 43% in FY25, with the US market representing 76% of this segment. Major contracts, including the US Army’s decade-long US$10 billion deal and the Maven Smart System expansion, underscore Palantir’s strategic importance amid heightened geopolitical tensions.
The third investment merit centres on Palantir’s robust financial position. The company maintains a cash-rich balance sheet with minimal outflows, expecting cash and equivalents to reach US$8.4 billion in FY25, representing over 80% of total assets. Operating cash flow is projected to grow approximately 80% year-over-year, while the company remains debt-free since 2022.
Market Opportunity and Technology Advantages
Palantir has captured merely 2.4% of its US$119 billion total addressable market as of 2020, based on FY24 revenue of US$2.9 billion. With AI software markets growing at over 25% compound annual growth rate, the expanding market presents substantial upside potential. The company’s core Ontology platform, enhanced with AI features through its Artificial Intelligence Platform (AIP), accelerates adoption and expands enterprise use cases, creating a competitive moat that supports sustained growth.
Frequently Asked Questions
Q: What is Palantir’s primary business and target market?
A: Palantir is a leading US analytics software company that helps large organisations integrate and analyse large datasets to improve decision-making and operations. Its customers include government agencies and commercial enterprises across various industries worldwide.
Q: What is Phillip Securities Research’s recommendation and target price for Palantir?
A: Phillip Securities Research has initiated coverage with a BUY recommendation and a target price of US$208.
Q: How fast is Palantir’s commercial business growing?
A: Palantir’s commercial revenue is growing over 50% year-over-year, driven by large US enterprises. Deal values doubled year-over-year in the third quarter of 2025, and US commercial revenue is projected to reach 73% of total commercial sales in FY25.
Q: What major government contracts support Palantir’s growth?
A: Key government deals include the US Army’s 10-year US$10 billion contract and expansion of the Maven Smart System. Government revenue is expected to grow 43% in FY25, with the US representing 76% of this segment.
Q: How strong is Palantir’s financial position?
A: Palantir maintains a robust cash position with expected cash and equivalents of US$8.4 billion in FY25, representing over 80% of total assets. The company has been debt-free since 2022 and expects operating cash flow to grow approximately 80% year-over-year.
Q: What is Palantir’s market opportunity?
A: The company has captured only 2.4% of its US$119 billion total addressable market from 2020, based on its FY24 revenue. With AI software markets growing over 25% annually, the expanding market presents significant upside potential.
Q: How has Palantir expanded its commercial market reach?
A: The company has diversified from serving 60 industries in 2021 to 90 industries in 2024, broadening its commercial addressable market and supporting adoption across new sectors.
Q: What technology advantages drive Palantir’s competitive position?
A: Palantir’s core Ontology platform creates a competitive moat, while AI features added through AIP (Artificial Intelligence Platform) accelerate adoption and expand enterprise use cases. AIP Bootcamps help shorten sales cycles for faster market penetration.
This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.
Disclaimer
These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products.
Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance.
Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries.
The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries.
Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
