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Mizuho Cautious on Valuation but Backs Palantir Technologies’ (PLTR) Growth Outlook

Palantir Technologies Inc. (NASDAQ:PLTR) is among the best machine learning stocks to buy according to analysts. While the competitive positioning of Palantir’s AI-driven data analytics platforms has broadly been undisputed, the stock’s valuation has become the headline, often overshadowing the underlying fundamentals.

Following the company’s Q4 2025 results, Mizuho, which rates the stock Neutral, saw a “significant comp multiple compression” and thus lowered its price target to $195 from $205. Mizuho’s analysts characterized the company’s results as “fantastic”, but remained on the sidelines due to its “extreme” valuation at 40 times 2027 revenue, which they also referred to as “dramatically above anything else in software.” Further, on a more cautionary note, the analysts expect that, in the next few quarters, the stock could be “subject to meaningful multiple reversion”.

While valuation has been a concern, Mizuho believes Palantir Technologies Inc. (NASDAQ:PLTR) is “increasingly well-positioned to benefit from long-term trends in AI, government digital transformation, and industrial modernization.”

This constructive view, despite the firm’s Neutral rating, is driven by the company’s continued strong execution: it reported 70% year-over-year (YoY) revenue growth in Q4 and guided to 61% revenue growth and 56% free cash flow margin for FY 2026, substantially ahead of street expectations. The company also reported its ‘Rule of 40’ score, a Software-as-a-service (SaaS) industry-specific measure to gauge profitability, at a stellar 127%.

Palantir Technologies Inc. (NASDAQ:PLTR) is a software company that develops and deploys data integration and analytics platforms for government agencies, defense organizations, and enterprise clients. Its notable products include Palantir Gotham, Foundry, and Apollo. The company’s software uses machine learning to analyze complex data and support decision-making.

While we acknowledge the risk and potential of PLTR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PLTR and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT:  12 Best Software Infrastructure Stocks to Buy According to Hedge Funds and Cathie Wood’s Stock Portfolio: Top 10 Stocks to Buy.

Disclosure: None. This article is originally published at Insider Monkey.

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Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

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  • 140 Metas
  • 84 Googles
  • 65 Microsofts
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  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
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