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Palantir Is Down 27%, But the Long-Term Math Still Favors Bulls
Written by Chris Markoch. Date Posted: 2/13/2026.
Key Points
- Palantir has penetrated just 2% to 3% of its expanding addressable market, leaving significant runway for sustained double-digit growth.
- High gross margins and operating leverage position the company to convert incremental revenue into outsized profit as adoption scales.
- Despite bearish commentary and recent stock volatility, analyst price targets and AI-driven demand trends support the long-term bull thesis.
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The broad sell-off in technology stocks has dragged down plenty of big names. Palantir Technologies (NASDAQ: PLTR) is no exception.
Following a gain of more than 136% in 2025, shares of PLTR are down more than 27% as of Feb. 12. For many investors, that kind of volatility shifts the conversation back to the stock's lofty valuation.
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In the short term, the market is a voting machine, and traders are clearly giving PLTR a vote of no confidence.
But in the long term the market is a weighing machine, and this reset looks like an opportunity for investors willing to take a long position in the AI stock.
A key reason is that despite strong growth on both the commercial and government sides, the company has penetrated only about 2% to 3% of its total addressable market (TAM).
The Math Behind the Market
When Palantir first went public in 2020, the company estimated a global TAM exceeding $120 billion across government and commercial verticals. At that time it had captured only about 2.4%. Five years later, TAM has expanded rapidly due to AI-driven demand in analytics, defense and commercial sectors, growing at a compound annual growth rate (CAGR) of roughly 25%.
Despite strong revenue growth in a deeper, more diversified market, Palantir's share of that TAM remains in the low single digits. If the company merely doubled its share to about 5%, that would imply a revenue base approaching $6 billion to $7 billion—still a modest fraction of the market's potential.
Accelerating demand for on-premise and classified AI systems should push the TAM to expand faster than Palantir's ability to supply it, keeping upside structurally intact. The big takeaway for investors is that modest gains in TAM could be enough to sustain double-digit growth for years.
Margins Built for Scale and Long-Term Growth
Part of Palantir's appeal is its operating leverage. Gross margins above 75% and expanding adjusted operating margins—recently in the 30% to 35% range—signal that incremental revenue flows disproportionately to profit. As commercial momentum compounds, Palantir's cost base should flatten relative to revenue, unlocking further scalability.
This structure supports a middle-innings growth narrative: Palantir appears to be growing into an enormous market with durable economics rather than peaking at maturity. Investors should view margin resilience not as merely defensive but as a platform for sustained compounding.
The underlying thesis for Palantir still rests on decades-long trends: the digital transformation of defense, the institutionalization of AI analytics, and the expanding utility of real-time data orchestration.
With only a small fraction of its TAM penetrated and expanding profit potential, Palantir remains a structurally advantaged player early in its growth curve rather than late in its cycle. Market volatility may obscure the view, but the math and the company's margins keep the long-term bull case intact.
A Word About Michael Burry
When PLTR is down more than 27% year-to-date, it's necessary to mention a key driver: Michael Burry—former manager of the now-deregistered hedge fund Scion Asset Management—and his bearish commentary about Palantir.
Burry does not believe the company's current winning streak will continue. Some of his recent speculations include:
- Palantir stock dropping as low as $46 per share.
- Palantir's market cap falling below $100 million.
By his own admission, much of Burry's criticism is based on anecdotal information from an unnamed former company staffer and other details he could not independently verify. Another element of his bearish thesis targets the company's heavy reliance on stock-based compensation—a critique that has followed Palantir since its 2020 public debut.
Notably, Burry is not actively shorting PLTR. Investors may recall that the company's shares previously dropped after it was revealed that Burry's now-defunct hedge fund had $912 million in bearish put options on the stock.
The bear case may be thin, but it can trigger fear among investors holding PLTR despite its lofty valuation—so the bottom may not yet be in for Palantir.
However, the company's latest earnings report showed strong results rather than signs of slowing growth. Plus, analysts (with the notable exception of Burry) continue to raise their price targets for PLTR. The consensus price target is now $191.05, which would be a gain of more than 47% from the stock's closing price on Feb. 12.
From Missteps to Momentum: Jack in the Box's Comeback Plan
Written by Thomas Hughes. Date Posted: 2/21/2026.
Key Points
- Jack in the Box is working through execution and balance-sheet challenges, while McDonald’s highlights what strong operational discipline can deliver.
- Despite weak first-quarter results, analyst targets and ratings suggest continued confidence in a recovery over time.
- Technical support, heavy institutional ownership, and elevated short interest could amplify any upside catalyst.
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Comparing Jack in the Box (NASDAQ: JACK) with McDonald’s (NYSE: MCD) may sound like comparing apples to oranges, but there is a connection. While McDonald’s executes at a high level, leans into digital, and takes market share, Jack in the Box has suffered a series of executive missteps that culminated in lost market share, reduced shareholder value, increased debt, and suspended capital returns.
The connection is that Jack in the Box's problems are fixable. It won't become McDonald's, but by taking cues from its more successful competitor it can reclaim lost ground and reinvigorate shareholder value. Last year's CEO change is the first of several events likely to push this consumer stock higher over time, if not all the way back to its previous highs.
Analysts Remain Optimistic for a JACK Turnaround
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Although Jack in the Box's fiscal Q1 2026 results were weak, the analyst response shows confidence in the turnaround efforts. (Note that Jack in the Box's fiscal reporting period does not align with the calendar year.) Sales fell more than expected, in part due to store closures intended to rationalize and optimize the franchise footprint, but optimism for a recovery remains high. The first revision tracked by MarketBeat reaffirms a Hold-equivalent rating while raising the price target to $23.
The $23 target sits below the consensus $26 but still supports expectations for a share-price recovery and the potential for a double-digit advance when it occurs. As of now, 21 analysts rate this stock a Hold, with a 67% conviction rate, and the consensus price implies more than 40% above the critical support level.
The critical support level in February 2026 is the long-term low set during the height of the COVID-19 panic. That low represents a likely market bottom and a potential turning point.
Price action in 2025 suggests a bottom may be forming, with the potential to become a reversal if upcoming reports show business and operational improvements. The price reaction after the release included a roughly 15% decline—alarming in size but not yet a decisive red flag. The decline and recent action broadly align with a Head & Shoulders bottom pattern.
Under this scenario, prices may dip in the near term, but the lows should arrive soon. If Jack falls below the support target and it proves to be a stepping stone to lower prices, the decline could deepen—potentially pushing JACK into levels not seen in more than two decades or even the single digits. However, indicators such as the technical setup and institutional activity suggest the $16.80 floor is a meaningful level of support.
Institutions Set Floor: Short-Sellers Provide Potential for Rapid Share Price Increase
Institutional ownership indicates strong confidence in the brand and its cash-generating ability. Although selling activity increased in Q4 2025 and Q1 2026, buying grew as well and outpaced selling. The net effect is accumulation and a solid support base, with institutions holding a very large share of the stock. The question now is what happens next—one answer could be a short squeeze or at least a short-covering rally.
Near-term headwinds persist, but store closures, quality improvements, and debt reduction position the business for a healthier recovery, a return to growth, and eventually resumed capital returns. With short interest above 26%, a catalytic event could be powerful. If a squeeze takes hold, reaching the consensus $26 target might be a natural pause, but technical targets, high short interest, and nearly 13 days to cover suggest the stock could advance into the $30–$40 range, and potentially higher.
Jack in the Box Amid Transformation: Catalysts Ahead
Key catalysts include debt repayments, which will free up cash flow; asset monetization, which will lighten the balance sheet; portfolio rationalization to optimize the footprint; and clearer capital-allocation plans. Capital returns were suspended to accelerate debt paydown, but that paydown is on track, making a resumption of dividends and/or share repurchases plausible sometime in 2027.
Assuming a payment of even half the last recorded dividend would yield more than 1%. At the end of Q1, the share count was marginally higher while cash increased by roughly 57%—a cash position sufficient to support accelerated debt reduction.
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