PLTR Stock in 2026 – Still Down 18% YTD Despite a 70% Revenue Surge

One of those stocks that divides rooms has always been Palantir. After the company announced a $300 million multi-year purchase agreement with the U.S. Department of Agriculture on Wednesday, shares closed at $152.62, up 4.56%. The deal is intended to replace decades’ worth of disjointed farm databases with a single software layer. The pop happened right away. By early Thursday morning, the skepticism had returned. Trading after hours fell 1.09%. That is Palantir in one trading day in 2026.

Beyond its monetary value, the USDA deal is significant. Palantir has been connected to the Pentagon, intelligence services, and the obscure areas of federal procurement that most citizens are unaware of for the majority of its two decades in business. A few years ago, it felt more like a policy think tank with vending machines than a software startup when I walked through its Denver office. Suddenly, the company is tracking crop-subsidy fraud and expediting disaster-aid payments to American farmers. It’s a distinct type of client. Additionally, it’s a sign that Palantir wants to be the government’s go-to data platform rather than just its preferred defense contractor.

The most recent quarter’s numbers are really impressive. Revenue for the fourth quarter of 2025 was $1.41 billion, up 70% from the previous year. The $0.25 earnings per share exceeded projections. For the entire year, government contracts, which account for 54% of the total, increased by 53%. Commercial revenue increased by 60%. This is a business that is operating at full capacity by nearly every metric. Despite having a P/E ratio of 240.92, one of the steepest multiples on the Nasdaq, the stock is currently trading 18% lower than it was at the beginning of the year.

That’s the tension that currently underlies every PLTR trade. The company is growing, contracts are piling up, and the President recently praised the company’s “war fighting capabilities” on social media. However, investors appear to think that the price already represents several years of future gains in addition to this year’s growth. They might be correct. They might also be underestimating the stickiness of federal data contracts after they are embedded. There is substantial financial support for both of these.

Sentiment is not improved by insider activity. In February, CEO Alex Karp made about $66 million by selling 493,025 shares at an average price of $133.78. Alongside him, CFO David Glazer sold. Last quarter, insiders sold off about $137.7 million in total. Executives profit when prices are high, so none of that is out of the ordinary for a stock that has reached as high as $207.52, but appearances count. The coverage was further complicated by Karp’s recently circulated “mini-manifesto,” which included suggestions to reinstate military conscription.

Wall Street is divided in intriguing ways, as is typical with Palantir. With a buy rating, Citigroup increased its target to $260. William Blair received an outperform upgrade. Loop Capital maintained its buy call while lowering its price target. Zacks reversed course, downgrading the stock to hold. Depending on which bull case you believe in, the consensus price target, which is close to $197, indicates about 30% upside.

As this develops, it’s difficult to avoid the impression that Palantir has evolved from a software stock into a discussion about the true value of AI firms in 2026. The SMART AI finalist status, the USDA contract, and the FAA modernization opportunity are all indicators of a business that has mastered the art of selling into federal budgets. However, the cost is acting independently. Even a 70% increase in revenue at 241 times earnings seems to some like just meeting expectations. The one question that no analyst has satisfactorily addressed is whether Palantir eventually corrects back toward its valuation or grows into it.