Morgan Stanley Raises Palantir Price Target to $233, Sees 65% Revenue Growth in 2027
Morgan Stanley raised Palantir's price target to $233 citing sovereign AI demand and margin expansion, while significantly increasing 2027 revenue and profit forecasts.
U.S. investment bank Morgan Stanley released a research report on November 3, 2026, raising its 12-month stock price target for AI software company Palantir Technologies Inc. (NASDAQ: PLTR) from $205 to $233, while maintaining an "Equalweight" rating. The adjustment follows Palantir's strong third-quarter earnings report, with the bank citing accelerating revenue growth, expanding margins, and rising demand for Sovereign AI solutions as key drivers.
According to the report, Palantir's Q3 revenue grew 96% year-over-year, and operating margins expanded by nearly 1,100 basis points to 61.7%. U.S. commercial revenue increased by 148%, while U.S. government revenue growth accelerated to 96%. Morgan Stanley analysts suggested that Sovereign AI could be another potential inflection point for the company, as the technology allows customers to train AI models using their own operational data and ontology. Additionally, the firm revised its future financial outlook upward: it increased the 2027 revenue growth forecast from 45% to 65% and raised the operating margin estimate for that year from 61% to 63.5%.
Despite analyst optimism regarding fundamentals, market reactions indicated continued investor concern over high valuations. Following the news, Palantir shares dropped 6% in pre-market trading, extending weekly losses of 10%. This divergence suggests that while institutions are confident in long-term growth prospects and new opportunities in Sovereign AI, current price levels may have already reflected some expectations, or tolerance for valuation premiums is decreasing.