HSBC says competition is increasing for Palantir Technologies as artificially intelligent agents erode barriers to entry into the company’s software space, which could negatively impact its stock price. The investment bank lowered Palantir’s rating from “buy” to “hold” and lowered its price target to $151 from $205, suggesting only 5% upside next year compared to Friday’s closing price. HSBC analyst Stephen Barsey said in a report released Friday that Palantir has achieved success by having customers embed its own engineers to implement the software and efficiently utilize the company’s AI platform. But that strategy is now becoming less attractive to customers, he wrote. “Success has inspired similar approaches by competitors like OpenAI,” HSBC said. “Furthermore, we believe the company’s traditional barriers to entry are starting to disappear with the proliferation of agent frameworks and Model Context Protocol (MCP) servers. The AI orchestration market is expanding rapidly, but the prospect of other players gaining share could put downward pressure on Palantir’s multiple.” For example, Palantir’s revenue is shrinking due to Anthropic’s revenue growth, Barsey said. Anthropic’s announcements about various models this year have hurt software stocks, amid concerns that AI will disrupt the industry’s business models. Palantir is scheduled to report results after the market closes on Monday. Bursey noted that last quarter’s “exceptional” performance was not met by a rise in the stock price, raising concerns about downside risk for the stock. 2026 PLTR YTD Mountain Palantir
