Citi Cuts Palantir Price Target to $210, Maintains Buy Rating

Citi lowered its price target on Palantir (NASDAQ:PLTR) stock to $210 from $260 while keeping a Buy rating, citing recent multiple compression in the AI software sector. Notably, the firm raised its Palantir estimates ahead of the Q1 2026 report, signaling fundamentals remain intact even as valuations across the sector reset.

Rating Change

• Previous Price Target: $260
• New Price Target: $210
• Rating: Buy (unchanged)

Analyst Rationale

The Citi analyst pointed to multiple compression in AI software stocks as the primary reason for the target cut. However, they raised revenue and profit estimates for Palantir ahead of Q1 2026, citing continued momentum from government and commercial contracts. The analyst believes fundamentals are solid, but previous high valuations needed adjustment.

Context

Palantir's stock has seen significant volatility over the past year, surging over 100% before retreating amid a broader correction in AI stocks. Other analysts have mixed views; some argue valuations remain stretched, while others see growth justifying current levels.

What to Make of It

Citi's target cut reflects a more realistic valuation view, but maintaining a Buy rating and raising estimates signals confidence in Palantir's long-term performance. Investors should watch the Q1 2026 earnings report for clearer signals.