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Analysts react to Palantir’s Q2: “Execution has been stunning”

But they’re still uncomfortable with the valuation.

8/5/25 9:58AM

Market leader and retail trader darling Palantir is on track for its best day since President Trump’s first TACO turn away from massive tariffs juiced the market on April 9.

The reason, of course, is the strong earnings numbers that the data analytics and AI software company reported Monday after the close. (TL;DR: They were great.)

Here are some highlights from the analyst notes we’ve been perusing this morning, which are largely laudatory, albeit with ongoing concern about the company's remarkably high valuation.

Bank of America (Rating: Buy | Price Target: $160 → $180):

“The ‘Rule of 40’ is a financial metric used to compare the sustainable performance of SaaS (Software as a Service) evaluating the right balance between growth and profitability. This rule suggests that strong SaaS should have a revenue growth rate that when added to the profit margin (usually EBITDA) exceeds 40%... Palantir has reached or exceeded this 40% mark over the last 5 years. Recent acceleration in topline growth — coupled with strong profitability — positions the company at unique 80%+ rule of 40 marks over the last three quarters.”

D.A. Davidson (Rating: Neutral | PT: $115 → $170):

“We believe Palantir is the best story in all of Software. We have raised our estimates and remain positive on the company overall. Palantir scores in the top decile of our coverage on Rule of X. The stock trades at ~103x CY25 revenue, an unprecedented premium to any peer, which is the only reason we maintain our NEUTRAL rating, while raising our price target to $170, from $115.”

Wedbush Securities (Rating: Outperform | PT: $160→ $200):

“We believe Palantir has a ‘golden path to become the next Oracle’ over the coming years and will grow into its valuation.”

Mizuho (Rating: Neutral | PT: $135 → $165):

“PLTR’s recent execution has been stunning, with material upward revisions across both Commercial and Government. That said, the stock’s multiple remains extreme, dramatically above anything else in software. While we continue to worry that the shares could suddenly be subject to material multiple reversion at some point over the next few quarters, PLTR’s uniqueness demands substantial credit. We believe PLTR is increasingly well-positioned to benefit from long-term trends in AI, government digital transformation, and industrial modernization. Reiterate Neutral and raise PT to $165 (from $135).”

Jefferies (Rating: Underperform | PT: $60):

“We commend the strong execution, but valuation at 74x CY26E rev is disconnected from even optimistic growth scenarios (55% 4-yr CAGR = 25x CY28E rev). Maintain Underperform.”

RBC (Rating: Underperform | PT: $40 → $45):

“Stepping back, the quarter and 2025 guidance were ahead of our expectations. However, with shares trading at 78x EV/CY26E revenue, well above peers, we view the risk-reward as negative, although we acknowledge a strong retail tailwind supporting the stock.”

Morgan Stanley (Rating: Equal-weight | PT: $98 → $155):

“The real insight software investors are after is why Palantir has been uniquely able to deliver such best-in-class results. It is increasingly clear that the recipe for such success lies in the company’s world class capabilities in: 1) software defined data integration/ingestion, 2) creating an ontology that allows AI models to have a true understanding of the underlying inter-relationships between data, transactions, employees and customers, 3) workflow automation and grounding state of the art models in enterprise data using the AIP platform and 4) bringing to bear highly technical engineers to help get customer’s complex use cases into production environments.”

J. Edward Moreno37m

FDA says it will take “decisive steps” against GLP-1 compounders, HHS refers Hims to DOJ for investigation

The Food and Drug Administration said it would take "decisive steps" to restrict GLP-1 compounding, a day after Hims & Hers announced that it would sell copies ofNovo Nordisk’sWegovy pill.

The FDA specifically called out Hims in the announcement. Additionally Department of Health and Human Services' General Counsel Mike Stuart said in a post on X on Friday he has referred Hims to the Department of Justice "for investigation for potential violations by Hims of the Federal Food, Drug, and Cosmetic Act and applicable Title 18 provisions."

Based on a review of the applicable facts, earlier today @HHSOGC referred Hims & Hers Health, Inc. (“Hims”) to the Department of Justice for investigation for potential violations by Hims of the Federal Food, Drug, and Cosmetic Act and applicable Title 18 provisions.
— HHS General Counsel Mike Stuart (@HHSGCMikeStuart) February 6, 2026

This marks a significant shift in tone from the FDA, which has done little to prevent companies like Hims from marketing copies of Novo's lucrative weight loss drugs.

Shares of Hims fell 14% after hours. The stock had already taken a hit after FDA Commissioner Marty Makary said in an X post on Thursday that the agency would “take swift action against companies mass-marketing illegal copycat drugs.”

Hims, long flying under regulators’ radar, finally strikes a nerve with its Wegovy pill copy

Based on a review of the applicable facts, earlier today @HHSOGC referred Hims & Hers Health, Inc. (“Hims”) to the Department of Justice for investigation for potential violations by Hims of the Federal Food, Drug, and Cosmetic Act and applicable Title 18 provisions.
— HHS General Counsel Mike Stuart (@HHSGCMikeStuart) February 6, 2026

This marks a significant shift in tone from the FDA, which has done little to prevent companies like Hims from marketing copies of Novo's lucrative weight loss drugs.

Tasha Matsumoto

Tech rebound propels stocks to best day since May

The S&P 500, Nasdaq 100, and Russell 2000 all climbed higher as the AI trade was back on.

Chicago Bulls Dennis Rodman (91) and Michael Jordan (23) in action, rebounding vs Charlotte Hornets

Max Knoblauch5h

Airlines rise, continuing their volatile 2026, as US-Iran talks may foreshadow some oil supply relief

Airline stocks are surging on Friday, as the market appears to be pricing in some medium-term oil pricing relief following talks between the US and Iran. Iranian officials referred to the meeting as “a good beginning.”

Shares of budget carriers, which have tighter margins and are more sensitive to fluctuations in fuel costs, are leading the surge. Frontier Airlines and Allegiant up more than 13%, while major airlines like United Airlines, American Airlines, and Delta Air Lines are also up at least 6%. JetBlue and Alaska Air are similarly up about 6%.

The market more broadly is rebounding on Friday, with the S&P 500 up 1.6% and bitcoin recovering some of this week’s losses.

Airlines have been volatile to start 2026 amid geopolitical tensions, varying annual forecasts, and the impact of winter storms.

Luke Kawa6h

The AI supply chain is soaring thanks to Amazon’s capex budget

If tech companies are going to spend way more than expected on capex, well, that means other companies are poised to benefit from that massive spending spree.

Amazon’s plan for $200 billion in business investment this year was the exclamation point to end a reporting period that saw every Magnificent 7 hyperscaler that provides guidance offer a 2026 capex budget well above what Wall Street had anticipated.

Here’s a look at the different parts of the supply chain that are soaring on the persistent demand for, and seeming scarcity of, AI compute:

Data center/neocloud companies: Applied Digital, CoreWeave, Cipher Mining, and Nebius, with some of these seemingly getting an extra lift from their legacy role as crypto miners.
Chips: the usual suspects — Nvidia, Broadcom, and Advanced Micro Devices.
Racks: Super Micro Computer, which is continuing its strong run following earnings, and Dell.
Power: Oklo, Nuscale, and Plug Power.

Big Tech capital expenditure soared in 2025. It’s going up another 50% in 2026.

Here’s a look at the different parts of the supply chain that are soaring on the persistent demand for, and seeming scarcity of, AI compute:

Data center/neocloud companies: Applied Digital, CoreWeave, Cipher Mining, and Nebius, with some of these seemingly getting an extra lift from their legacy role as crypto miners.
Chips: the usual suspects — Nvidia, Broadcom, and Advanced Micro Devices.
Racks: Super Micro Computer, which is continuing its strong run following earnings, and Dell.
Power: Oklo, Nuscale, and Plug Power.

Matt Phillips7h

For memory chips, the “parabolic price hike” is continuing to ramp higher

The remarkable run-up in prices for memory chips continued into early February, analysts at Bernstein Research say, driven largely by data center demand from hyperscalers and cloud service providers (CSP).

Prices for NAND flash memory wafers — a type of memory used in devices, as it retains data even when powered down — soared 35% between the end of 2025 and February 2.

Spot prices for DRAM — ubiquitous short-term data storage chips — jumped about 28% in that period. But that massively understates the remarkable shift in pricing for what were long seen as commodity tech hardware inputs. DRAM prices are more than 2,000% over the last year, while NAND prices are up more than 600% in that period.

The ongoing momentum provides still more support for memory chip plays like Micron and Sandisk, which have been big market winners in recent months.

In a note published earlier this week, Bernstein Research analysts wrote:

“The parabolic price hike continued in Jan. Indicated price increase for 1QCY26 is much stronger than we expected and we hence see upside to our near term memory pricing projection. Unrelenting CSP demand remained the main driver. PC and Mobile demand hasn’t been destroyed yet because of lean inventory & pull-forward purchase. Going forward price hike is expected to continue but likely at a slower rate, as PC and Mobile demand should contract meaningfully this year. Price however may stay elevated throughout this year, supported by CSP demand.”