Citi is bullish on Palantir (PLTR.US): US government and commercial business two-wheel drive Q3 revenue is expected to exceed expectations

The Zhitong Finance App learned that Citibank analysts said in Thursday's report that despite a marked increase in the comparison base, Palantir (PLTR.US)'s revenue for the third quarter of fiscal year 2026 is expected to once again exceed market expectations, mainly driven by the US government and commercial business. Citi maintained its “buy” rating on Palantir and raised its price target from $245 to $250.

Citigroup analysts wrote in the report: “Our quarterly inspection results with our partners were very strong, especially at the end of the US federal fiscal year. A partner specializing in federal business said its broader technology business grew by more than 60% year over year, and Palantir was the biggest beneficiary, reflecting a clear rebound in related business after experiencing headwinds associated with the Department of Government Efficiency (DOGE) last year. ”

Citi expects Palantir's commercial revenue to continue its upward performance in the second fiscal quarter. Among them, although the comparison base is 30 percentage points higher, US commercial revenue growth is still expected to exceed 140%; international commercial revenue is likely to accelerate again. The revenue of US government departments is also expected to exceed expectations, by a margin similar to that of the past few quarters.

Citi added, “Although our federal contract tracking data has declined, if we take into account the typical lag in US Department of Defense contracts over the past 6 quarters (average quarterly revenue of 300 million to 400 million US dollars or more), the indicator still points to healthy growth. We expect Palantir's fiscal 2026 revenue growth guide to be drastically raised again by about 10 percentage points, mainly driven by the US business.”

Palantir plans to release third-quarter results after the US stock market on November 2. The market expects adjusted earnings per share of $0.41 and revenue of $2.18 billion. For the same period last year, Palantir had adjusted earnings of $0.21 per share and revenue of $1.18 billion.

By Thursday's close, Palantir closed down 2.74% to $196.19. Since this year, Palantir's stock price has risen 10% cumulatively, and its performance is lower than that of the S&P 500 index.