Palantir shares surged 5.8% on Monday, bringing a 13% gain over four sessions after eight firms upgraded their ratings following a 38% decline from November record highs. Of 31 analysts, 20 now rate the stock a buy, nine hold, and two sell, with a consensus target implying 32% upside.

The company’s defense bookings include a 2024 $100 million Maven Smart System award and a summer 2025 $10 billion U.S. Army contract aimed at accelerating data integration and AI tool deployment for military operations, solidifying its position in core government and intelligence markets.

Even after a valuation reset from 247x to 104x forward earnings and from 89x to 45x forward sales, Palantir remains among the most expensive S&P 500 stocks. Its projected 73% revenue growth over the next 12 months and strong earnings beat have underpinned recent upgrades despite concerns over pricey multiples.

Heightened tensions in the Middle East have spotlighted Palantir’s battle management tools, presenting potential new customers focused on supply chain risk. However, uncertainty over conflict duration and ethical scrutiny of government partnership pose ongoing adoption and reputational challenges.