Palantir Technologies stock may be down 20% this year amid investor anxiety about what artificial intelligence means for software companies, but one firm remains bullish on Alex Karp’s company.

Palantir stock pared early losses, advancing 1% to $143.09 on Friday after sinking 7.2% on Thursday amid a broad software stock selloff on key earnings reports. For comparison, the S&P 500 rose 0.8% on Friday while the Dow Jones Industrial Average dropped 0.2%.

After three straight years of mammoth gains, 2026 has been a rocky one for Palantir. Shares ended Friday down 2.3% for the week, part of a 20% fall this year. Palantir stock is 31% below its record closing high of $207.18 from Nov. 3, 2025, according to Dow Jones Market Data.

Despite Palantir stock’s decline this year, a Rosenblatt analyst team led by John McPeake on Friday reiterated its Buy rating and kept its $200 price target on the shares. That price target implies 40% upside.

“Although there is free-floating anxiety in the market about what AI could do to any company with the label software attached to it, we think Palantir is one of the few software companies actually seeing real growth driven by enterprise AI,” McPeake wrote.

The firm added that it expects business momentum from the fourth quarter to continue into the first half of 2026, with “strong” first-quarter results and 2026 guidance when Palantir reports on May 4.

Broadly speaking, Rosenblatt expects Palantir’s revenue growth to continue at an impressive clip. Palantir over the past four quarters has logged year-over-year revenue growth of 70%, 63%, 48%, and 39%, respectively.

Wall street forecasts first-quarter revenue increasing 74%, according to FactSet.

“We think an AI proof point for Palantir vs. their software peers is that AI has driven an organic acceleration in revenue growth rate at Palantir, while other enterprise software companies have endured relatively little deceleration in their growth rates, all while selling AI add-ons,” McPeake wrote.

The firm noted that through the next three to five years, Palantir’s growth prospects remain strong. However, “beyond that there are vague fears that the AI providers would either be directly competitive or be mated with other solutions to imitate Palantir.”

“Details on how this would occur are unclear, but we think that is one of the key aspects of the software fear trade,” McPeake wrote.

Palantir has also been benefiting from U.S. government deals, including announcing Wednesday a $300 million purchase agreement with the U.S. Department of Agriculture to support the National Farm Security Action Plan and modernize how the department delivers services to U.S. farmers.

“We think our estimate of government revenue growth of 58% this year and 53% next year looks very achievable,” McPeake wrote.

The analyst consensus estimates call for Palantir’s U.S. government revenue to increase 45% in 2026 and 32% in 2027, according to FactSet.