Mizuho Cautious on Valuation but Backs Palantir Technologies’ (PLTR) Growth Outlook

Core Viewpoint - Palantir Technologies Inc. is recognized as a leading machine learning stock, with its AI-driven data analytics platforms being well-positioned in the market, although its stock valuation has raised concerns among analysts [1]. Financial Performance - In Q4 2025, Palantir reported a remarkable 70% year-over-year revenue growth and provided guidance for 61% revenue growth and a 56% free cash flow margin for FY 2026, exceeding market expectations [3]. - Mizuho lowered its price target for Palantir from $205 to $195, citing significant multiple compression despite characterizing the company's results as "fantastic" [2]. Valuation Concerns - Mizuho analysts noted that Palantir's valuation is extreme at 40 times 2027 revenue, which is significantly higher than other software companies, leading to a cautious outlook on the stock [2]. - There is an expectation of potential multiple reversion in the coming quarters, indicating that the stock may face downward pressure [2]. Market Positioning - Despite valuation concerns, Mizuho believes Palantir is well-positioned to capitalize on long-term trends in AI, government digital transformation, and industrial modernization [3]. - Palantir develops data integration and analytics platforms for various sectors, including government and defense, utilizing machine learning to enhance decision-making [4].