Lowering targets, raising expectations... Citigroup "bullish" on Palantir (PLTR.US): Strong performance in commercial and federal business, reiterates "buy" rating.

When the stock price of Palantir (PLTR.US) fell more than 30% cumulatively during the year, and the market's enthusiasm for AI concept stocks continued to wane, Citigroup analyst Tyler Radke chose to remain optimistic against the trend. This Wall Street bull, who has long been optimistic about Palantir, reaffirmed a "buy" rating while lowering the target price from $225 to $200. However, the reduction in the target price is not due to pessimism - on the contrary, Radke significantly raised the profit forecast for the fiscal year 2027, expecting revenue to grow by 53% year-on-year, far exceeding the Wall Street consensus of about 45%. This contradictory operation of "lowering the target, raising the forecast" reflects the unique dilemma that Palantir is currently facing: the fundamentals are accelerating, but the valuation is still digesting the past bubble. Palantir is scheduled to announce its latest quarterly earnings after the US stock market on August 3rd. Q2 US Commercial Business: Strong Rebound After "Unexpected Slowdown" The core basis for Radke's upward revision of profit forecasts is the strong rebound expected in the US commercial sector. He wrote in his report, "We expect a rebound in US enterprise business after an unexpected slowdown in the first quarter, mainly due to adjustments in resource priorities and the expansion of AIP projects into new industries and regions." Radke further pointed out that communication with partners and management during the quarter "was generally positive" and global systems integrators and independent software vendor partners continued to show growth momentum. Citigroup expects that net additions to the net RDV (remaining performance obligation) of US commercial business will rebound to over $800 million in the second half of 2025, further driving the upward revision of expectations for fiscal year 2027. Specifically, Radke expects commercial revenues in fiscal year 2027 to grow by 67% year-on-year. Taking a more macro perspective, Palantir's AI platform (AIP) is transitioning from experimental deployment to mission-critical infrastructure. The company's revenue in the first quarter of 2026 increased by 85% year-on-year, with commercial revenue in the United States skyrocketing by 133%. The company has raised its annual guidance twice, and is currently expecting revenue to grow by about 71% in 2026. AIPCon 10 and Customer Expansio... If Palantir can once again deliver better-than-expected results and confirm the rebound trend in its US commercial business, then Citigroup's description of a "more attractive risk-return ratio" may be reevaluated by the market. Until then, this AI data analysis giant will continue to seek a balance between "growth miracle" and "valuation digestion."