Prediction: Palantir Stock Will Trade At $300 in 2027. Here's the Math
Key Points
Palantir stock has jumped impressively in the past month, and it won't be surprising to see that trend continue due to its growing backlog.
The company is signing larger contracts, leading to a sharp improvement in its margins and earnings per share.
Palantir can outperform Wall Street's expectations and deliver significant upside over the next year or so.
Palantir Technologies (NASDAQ: PLTR) stock regained its mojo after the company released its second-quarter results on Aug. 3, with shares of the software specialist rising more than 29% the following day.
It was easy to see why that was the case. I was expecting Palantir stock to go parabolic following its earnings release, primarily due to its considerable influence in the artificial intelligence (AI) software market and a solid revenue pipeline that's driving robust growth acceleration.
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The good news for Palantir investors is that this AI stock has sustained its momentum following its latest results. Specifically, Palantir's shares have jumped 39% since its earnings release. I won't be surprised to see the stock sustain its solid momentum over the coming year and hit $300.
Let's see why that may be the case.
Image source: The Motley Fool.
Palantir's accelerating growth should be rewarded with more upside
Palantir's Q2 revenue jumped 93% year over year to $1.94 billion, easily surpassing the consensus estimate of $1.8 billion. Its non-GAAP earnings per share jumped by 2.5x year over year to $0.41, driven by a solid expansion in spending by Palantir's customers.
Palantir's total contract value (TCV) increased by 49% year over year in Q2 to $3.38 billion, exceeding the overall jump in the company's top line. This clearly indicates that Palantir is getting more business than it can fulfill right now, and that's helping the company build a solid long-term revenue pipeline.
Palantir reported that its remaining deal value (RDV), which refers to the total value of unfulfilled contracts at the end of a quarter, increased by 83% year over year in Q2 to $13.1 billion. This strong revenue pipeline explains why Palantir now expects full-year revenue to increase to $8.15 billion, up from the earlier estimate of $7.65 billion.
The updated guidance points to a potential increase of 82% from last year. It is worth noting that Palantir's top line increased by 56% in 2025. Palantir is benefiting from an increase in its customer count and a jump in spending by existing customers. The company's net dollar retention rate stood at an impressive 157% last quarter, up 700 basis points from the previous quarter.
This metric compares the trailing-twelve-month (TTM) revenue from Palantir's customers at the end of a quarter to the TTM revenue from the same customer cohort in the year-ago period. So, a reading above 100% means Palantir's customers are now spending more on its offerings. A jump in the net dollar retention rate points toward stronger adoption of its generative AI software solutions.
Here's why Palantir is headed to $300
Analysts seem to be underestimating Palantir's growth potential. The stock has a 12-month median price target of $203, according to 35 analysts covering Palantir. That suggests a 16% jump from current levels.
It is worth noting that analysts expect Palantir's top-line growth to slow down to 49% in 2027 to $12.17 billion. However, such a slowdown seems unlikely given Palantir's growing revenue pipeline and the fact that it added 200 new customers last quarter, which can increase usage of its offerings and drive stronger growth.
Assuming Palantir's 2027 revenue growth matches its 2026 growth forecast of 82%, its top line could hit almost $15 billion next year. Palantir stock is currently trading at a pricey 73 times sales, though that valuation is justified by Palantir's accelerating growth and future potential. But even if Palantir trades at 50 times sales at the end of 2027 and achieves $15 billion in revenue, its market cap could hit $750 billion.
That's 78% above its current market cap and will be enough to push Palantir's stock price beyond $300. So, buying this high-flying tech stock right now could be a smart move for investors looking to capitalize on the fast-growing demand for generative AI software, as Palantir seems capable of sustaining its momentum and making investors richer over the next year and a half.
Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.