Wedbush's Dan Ives Defends Palantir (PLTR) Stock as Premier AI Investment Despite 2026 Decline

Key Takeaways

Table of Contents

Wedbush analyst Dan Ives named Palantir his premier software selection beyond the Magnificent Seven, characterizing its fourth-quarter performance as “stunning”
Ives believes the AI transformation is merely in its “third inning,” with potential U.S. government contracts valued in the trillions
Approximately $20M in revenue reclassification from commercial to government affected Palantir’s commercial figures, though Ives views it as inconsequential
PLTR shares have declined over 17% year-to-date in 2026, yet the stock trades beneath its five-year averages across multiple valuation metrics, sporting a forward P/E of 132x
Analyst consensus registers a “Moderate Buy” rating with an average price target of $195.04, suggesting approximately 32% upside potential

Wedbush Securities analyst Dan Ives made waves during a recent CNBC appearance with his bullish stance on artificial intelligence. He positioned Palantir as his preferred software investment beyond the Magnificent Seven cohort, emphasizing that the AI expansion still has considerable room to grow.

Palantir Technologies Inc., PLTR

Employing a baseball metaphor, Ives characterized the current AI cycle as only reaching the “third inning,” directly challenging market concerns about potential bubble conditions. His perspective: the artificial intelligence revolution is gaining speed, not approaching exhaustion.

PLTR shares have tumbled over 17% during 2026. Nonetheless, Ives characterized the company’s latest quarterly performance as “stunning” and positioned Palantir in “a whole other category” relative to competing software enterprises.

The equity has retreated from elevated valuation levels and currently trades under its five-year historical averages across various measures. However, investors should note that a forward price-to-earnings ratio of 132x still represents a substantial premium.

Palantir delivered fourth-quarter fiscal 2025 revenue of $1.41 billion—representing a 70% year-over-year surge. Domestic U.S. revenue reached $1.08 billion, climbing 93% compared to the prior-year period.

Full-year 2025 revenue totaled $4.475 billion, marking a 56% annual increase. GAAP earnings per share for Q4 registered at $0.24, while full-year GAAP EPS reached $0.63.

Commercial Revenue Concerns Explained

One criticism of Palantir’s recent quarter centered on commercial revenue underperforming analyst expectations. Ives quickly addressed this concern—approximately $20 million transferred from commercial to government categories due to a single contract reclassification.

He characterized this as an accounting adjustment rather than an indicator of underlying business deterioration. According to Ives, government AI demand represents the narrative investors should prioritize.

Ives characterized U.S. government AI expenditure as “the golden goose.” He projects contracts could total hundreds of billions of dollars, with extended-term potential reaching into the trillions.

“For numerous software enterprises, government-related business could potentially double within the next two to three years,” Ives stated during his CNBC interview.

Cybersecurity Emerges as AI Infrastructure Beneficiary

Ives additionally highlighted cybersecurity as a major winner from the AI infrastructure expansion. He projected security budgets could increase 50% as agentic AI creates more sophisticated threat environments.

He labeled this “the most connected trade” he had witnessed—indicating the AI infrastructure wave and corresponding security spending requirements are inextricably linked.

Regarding regulatory oversight, Ives expressed doubt that government intervention would substantially decelerate industry progress. He noted technological advancement was outpacing any regulatory framework’s ability to respond.

Palantir’s forward-looking guidance indicated Q1 2026 revenue expectations of $1.532–$1.536 billion. Full-year 2026 revenue projections fall within the $7.182–$7.198 billion range.

U.S. commercial revenue independently is forecast to exceed $3.144 billion for the complete year.

Rosenblatt Securities maintained its Buy rating on PLTR with a $200 price objective on April 24. Mizuho preserved its Outperform rating while adjusting its target downward from $195 to $185.

According to 28 Wall Street analysts, the consensus stands at “Moderate Buy” with an average price target of $195.04—approximately 32% higher than current price levels.

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