Goldman Sachs: Sovereign AI unlocks $500 billion market, Palantir upgraded to Buy

According to Chaotang Research, a Goldman Sachs report dated October 8, 2026 upgrades Palantir's rating from Hold to Buy, with a price target of $230 against a current stock price of $194.12, representing an upside potential of 18.5%. Goldman Sachs estimates Palantir's total addressable market could reach up to $500 billion, with an addressable market size of approximately $35 million per customer, while current average commercial revenue per customer stands at around $4 million. Goldman Sachs notes that sovereign AI and custom applications are driving a step-change expansion in the addressable market. The FDE model and AI FDE underpin profit margins, and the U.S. government is shifting from project-based to platform-based engagements. Key risks include competitors expanding their FDE footprint, slowing enterprise AI adoption, and volatility in government procurement. Goldman Sachs has increased its revenue projections for 2026 through 2029 to $8.371 billion, $13.233 billion, $19.335 billion, and $25.747 billion, respectively.