- Palantir stock continued to trade downwards despite good earnings report released in early February as valuation concerns ruled
- The Middle East war is currently providing fuel for Palantir, thanks to the use of its platform for military decision making
- The company has a high valuation and a calm in the war could bring pressure back to its stock
Palantir Technologies (NASDAQ: PLTR) has had an interesting few months. After hitting almost $207 at the end of 2025, the stock dropped to around $130 in the first two months of 2026. Then on February 26, it made a comeback, and has been rising for four days straight and nearing $150. This rise has drawn investors back in, especially since it didn’t happen right after their strong Q4 2025 earnings report on February 3. So, what’s going on?
Why Did Palantir Stock Take Time to Recover Post Earnings?
Palantir’s earnings report looked great on paper. They announced $1.41 billion in income, up 70% from last year, and beat predictions with $0.25 earnings per share. The reason the stock didn’t immediately jump was that expectations were already high, and there was some general doubt about AI.
Also, the financials press didn’t talk about the fact that the earnings report was already factored into the stock price. Investors who expected good results had already priced in. That’s why the boost after earnings didn’t last long. Though they exceeded expectations, the stock fell 11.6% on February 4, due to worries about the high price-to-earnings ratio (100x forward P/E) and a possible AI bubble. The stock also fell up to 6.5% in one day after a report linked Palantir to U.S. Immigration and Customs Enforcement issues. This added to the selling pressure.
Why Is Palantir Stock Rallying?
Three forces are responsible for the four-day winning streak.
First, the Middle East conflict. Strikes against Iran by the US and Israel have pushed up defense stocks because of worries that the conflict could last a while. Palantir, which studies real-time warfare and analyzes possible results to inform decisions, is now vital to US military decision-making.
Second, timely analyst upgrades. Mizuho increased its target to $250 on February 18, pointing to strong US business growth. UBS also upgraded the stock to Buy with a $180 price target, saying Palantir is a top growth story at the center of AI and data investment.
Is This Rebound Sustainable?
The rebound could continue if Palantir shows good AI adoption, but there are difficulties. The war is helping, but it’s also temporary and hard to predict. The market’s stability despite geopolitical tensions shows that investors think the conflict with Iran will be controlled and won’t affect the broader economy.
If this is true, and the conflict decreases within President Trump’s stated timeline of four to five weeks, the defense premium across the sector, including in PLTR, will go down.
Palantir Stock Price Forecast
PLTR shares trading have the buyers in control, with the RSI on the daily chart at 51. The stock pivots at psychological $140 and will likely encounter the first resistance at $147.15. Breaking past that level will move the next target to the 200-day EMA at 151.42. If the stock closes above $145 for a week, it could move toward $155, the next resistance level. If it drops below $140, initial support is at $135.70. If it goes below that, it could reach $13050, near its February lows.
Palantir stock on the daily chart with key levels of support and resistance on February 3,2026. Created on TradingView
Because the results were mostly expected. The stock was already priced high, so even exceeding expectations wasn’t enough to change things. The market was concerned with the stock’s value, not just the quarterly results.
Yes, with a P/E ratio often above 100, the stock is priced very high. Any small slip in future earnings or slower AI Program adoption could cause another sharp decrease, making it a risky investment.
Partly yes, because it shares the same fragility. If the conflict ends quickly, the defense premium will reduce, and Palantir’s value will be based on ratios again.