MW This former Palantir bear changed his tune on the stock. Here's why.

By Britney Nguyen

A Mizuho analyst isn't ready to turn bullish just yet, but he abandoned his bearish call while writing that the company's 'recent execution and momentum is stunning'

Palantir Technologies Inc.'s stock has seen a spectacular rally in recent years, but its high valuation has invited a chorus of skeptics on Wall Street. Now one of them is softening his tone, writing that he "underestimated" the company's recent momentum in its commercial and government businesses.

Mizuho Securities analysts led by Gregg Moskowitz upgraded Palantir's stock (PLTR) to neutral from underperform on Wednesday. The analysts said the company's "recent execution and momentum is stunning," while noting that they see "a legitimate chance" for Palantir to accelerate its revenue growth for a fifth consecutive quarter when the company reports its second-quarter earnings results next month.

See more: Palantir's stock is up 400% in a year. Here's why one vocal bull sees more gains ahead.

The Mizuho analysts said they "are equally stunned by the multiple that [Palantir] has attained, which places its valuation dramatically above anything else in software." Palantir trades at an enterprise-value-to-sales multiple of 97 times and 77 times, based on estimates for 2025 and 2026, respectively, the analysts said. Despite their ongoing concerns that the stock "could suddenly be subject to material multiple reversion" in the next few quarters - meaning that the stock's multiple could turn lower - the analysts said the company's "uniqueness demands a great deal of credit."

Palantir looks to be "well-positioned to benefit from long-term trends in [artificial intelligence], digital transformation, and industrial modernization," Mizuho said.

After the upgrade, 17 of the 28 analysts tracked by FactSet now have neutral-equivalent ratings on Palantir's stock, while seven have bullish ratings and four are bearish. Palantir's stock has surged more than 400% over a 12-month span.

The company's commercial business in the U.S., which makes up about 30% of its revenue, is seeing more enterprises adopt its artificial-intelligence platform, the analysts said. There's also a "growing urgency around internal data integration," which the company's Foundry platform is used for. And the company's AIP bootcamps, which teach potential customers how to use its technology, "are helping the company accelerate its land-and-expand process and meaningfully compress sales cycles."

The use cases for Palantir's software platforms are "broadening meaningfully" in several segments, the analysts noted, including finance, healthcare and energy. The analysts also see Palantir's manufacturing operating system Warp Speed helping it expand its reach into "under-digitzed sectors like logistics and physical infrastructure" - especially as the U.S. steps up its efforts to bring more manufacturing stateside.

There's also "a material uptick in enterprise inbound activity," the analysts said, citing recent industry checks, which signals customer interest and gives them "more confidence in [Palantir's] ability to beat its already impressive guidance for at least 68% U.S. Commercial revenue growth this year."

Meanwhile, the company's business with the U.S. government, which contributes 42% of revenue, is also performing well, the analysts said, adding that Palantir is seeing "a steady flow" of contracts and awards from federal agencies. The analysts said they are staying "positive" on Palantir's public-sector opportunity, "which appears durable given ongoing geopolitical instability."

In the near term, the analysts see Palantir's government revenue sustaining growth at more than 40% from a year earlier.

Still, the Mizuho team wasn't ready to turn bullish on the stock, citing "many more compelling names to own in software at these levels." And their $135 target price on Palantir's stock is below the roughly $150 level where the stock was trading early Wednesday.

-Britney Nguyen

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July 16, 2025 10:39 ET (14:39 GMT)

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