Palantir Technologies Inc. (PLTR) shares edged lower in regular trading, closing down 0.25% at $178.96, before extending losses slightly in overnight trading, where the stock slipped 0.41% to $178.22. The company confirmed it will report Q4 2025 earnings on February 2, 2026. The shares dipped, despite Citigroup (Citi) turning more bullish on the stock. The slide is underscoring investor caution around valuation despite growing optimism tied to artificial intelligence and U.S. defense spending.
The confirmed February 2 earnings date, with results scheduled for release post-market, is a critical near-term catalyst for PLTR. Citi expects Palantir Technologies to deliver increased fourth-quarter revenue, driven by accelerating adoption of the company’s AIP (AI Platform) across U.S. government agencies and commercial customers. The upcoming Q4 2025 earnings report will be closely scrutinized as investors look for confirmation that Palantir can sustain its rapid growth pace amid rising expectations.
In a note to clients, Citi analyst Tyler Radke upgraded PLTR to Buy / High Risk from Neutral and raised his price target to $235, implying more than 30% upside from current levels. Radke said Palantir Technologies is benefiting from a structural shift tied to the emerging AI supercycle, particularly in mission-critical deployments where switching costs are high.
Citi now projects around 51% year-over-year growth in Palantir’s government segment, driven by expanding contracts across defense, intelligence, and allied government agencies.
Valuation Pressures Persist as Project Golden Dome Drives Defense Outlook
Despite Citi’s optimism, valuation remains a central concern for U.S. equity investors. PLTR currently trades at approximately 178x forward earnings, a multiple that continues to divide Wall Street.
Reflecting that caution, Cathie Wood’s ARK Invest disclosed it sold roughly $10 million worth of Palantir shares recently, citing valuation discipline even as it remains constructive on the long-term AI opportunity.
A key driver in Citi’s thesis is Project Golden Dome, a U.S.-led defense modernization initiative expected to scale meaningfully in 2026 and 2027. Palantir Technologies is viewed as a core analytics and decision-support provider for the program, which aligns with a potential $1.5 trillion U.S. military budget. President Donald Trump proposed a $1.5 trillion U.S. defense budget for fiscal 2027 in a post on his Truth Social platform.
Citi also highlighted growing demand from U.S. allied forces, reinforcing Palantir’s strategic position in global defense modernization efforts.
Palantir CEO Alex Karp had earlier emphasized strong momentum in both U.S. and European markets, noting that geopolitical instability is accelerating demand for secure, scalable AI systems. The company’s AIP bootcamps, which allow customers to deploy agentic AI workflows rapidly, are increasingly viewed as a differentiator versus competitors such as Oracle and emerging AI infrastructure firms like Nebius.
While Palantir stock showed modest weakness, sentiment around PLTR appears to be shifting from pure valuation skepticism toward confidence in long-duration growth tied to AI and defense. With the February 2 earnings report approaching, investors will be watching closely to see whether execution and guidance can justify the stock’s premium valuation.
