William Blair believes that Palantir ‘s recent pullback has made the stock more attractive ahead of its Tuesday earnings release. The investment bank upgraded the software analytics company to an outperform rating from market perform. Analyst Louie DiPalma’s $200 per share price target implies upside of 36% from current levels. Shares of Palantir have plunged 29% since reaching a record in November, but remain 78% higher over the past 12 months. PLTR 1Y mountain PLTR 1Y chart DiPalma wrote that his upgrade follows Palantir’s recent selloff and ahead of its earnings announcement. The company will report fourth-quarter earnings after the market closes on Monday, Feb. 2. “Although Palantir’s valuation is still frothy, it appears more reasonable relative to recent venture rounds for companies tied to the AI ecosystem. Despite the momentum, Palantir shares have not been immune to the broader software vibe coding selloff,” the analyst wrote. “In our view, the recent selloff creates a buying opportunity for Palantir as a leader in the AI supply chain.” DiPalma shared that William Blair’s proprietary government and commercial trackers indicate that Palantir’s momentum has continued. With both the Trump administration and enterprises adding workflows, Palantir had an “astounding” September quarter and will likely report a “very strong” December quarter as well, DiPalma wrote. The analyst added that he expects a positive move post-earnings, although the reaction “will surely be volatile.” “Even if shares decline post-earnings as they did last quarter, we expect shares to return to greater than $200 over the next 12 months as positive developments suggest the hyper-growth and margin expansion can continue,” he added. Meanwhile, DiPalma expects Palantir’s operating margin to increase to 65% from 50% over the next five years. He also forecasts Palantir will generate free cash flow of at least $7 billion in 2030, boosted by sustained revenue growth and continued margin expansion.