Among Wall Street analysts covering Palantir Technologies’ stock, bulls are still in the minority. But the “buy” camp just got a little bigger.

Citi analyst Tyler Radke turned bullish on Palantir shares on Monday, writing that he had more confidence about an upcoming “supercycle” for the software company’s U.S. commercial and government businesses.

The upgrade follows “spectacular returns” for Palantir shares recently. They’ve gained more than 2,400% over the past three years and now trade at an expensive 68 times Citi’s estimates for enterprise value to fiscal 2027 sales. Radke, though, is looking past that, as his $235 price target implies about 30% upside relative to the $179 level where Palantir’s stock currently trades.

Estimates, he added, could move significantly higher again in 2026.

Radke pointed to recent conversations in the tech industry that suggest increasing enterprise budgets for artificial intelligence. He also sees expanding use cases for AI, and particularly agentic AI-applications that can carry out tasks on a user’s behalf.

Palantir has been dramatically reaccelerating its growth and could continue showing strong trends when it posts fourth-quarter results soon. Third-quarter revenue jumped 63% from a year earlier, mostly driven by Palantir’s U.S. commercial business. Radke expects 62% growth in total revenue for the fourth quarter.

Growth could go even higher in 2026, with the Citi team detailing an upside case in which total revenue increases 70% to 80% for the year. That’s based on the company’s disclosure of consistent triple-digit growth in remaining deal value for its U.S. commercial business, which Radke described as a “proxy for future commercial expansions.” Momentum there can “provide a stronger-than-expected tailwind” for U.S. commercial revenue in the next few quarters, he said.

Meanwhile, “renewed urgency” among both U.S. and Western European governments to modernize technology, along with growing defense budgets, could lift Palantir’s government business, Radke said. He pointed to pushes by the North Atlantic Treaty Organization and the European Union for more defense spending, and he sees those as signs that “allied budgets are moving structurally higher.”

Meanwhile, recent commentary from defense companies suggests “a durable, multi-year rearmament cycle” including allied defense budgets, foreign military sales and backlogs moving to production that should spur an acceleration in international government revenue, according to Radke.