Palantir Technologies Inc. is heading into its latest earnings release with investor expectations running high — and a valuation that some analysts say is stretched to its limits, Bloomberg reports.
The data analytics and software company has become one of Wall Street’s top performers, but the rapid rise in its stock price has also set a high bar for continued outperformance.
Shares of Palantir have surged 64% so far in 2025, extending last year’s explosive 340% rally. This performance makes it the best-performing stock in the S&P 500 this year and the top gainer since former President Donald Trump’s recent tariff announcements. Yet the rally has also made Palantir the most expensive stock in the Nasdaq 100 when measured by forward earnings — now trading at over 200 times expected earnings and more than 70 times projected sales.
This elevated valuation comes despite positive momentum in the company’s fundamentals. Analysts have raised their forecasts, expecting revenue growth of 36% and a more than 60% increase in adjusted earnings for 2025. Palantir’s software, which is heavily used in military and intelligence operations, has gained traction globally. NATO recently adopted one of its AI-powered military systems, and the US Army has praised its latest field-intelligence hardware.
Still, market observers warn that strong fundamentals may not be enough to justify the current price level unless the company delivers another standout earnings report. Palantir has a track record of doing just that — its last two reports triggered gains of more than 20%, and it has posted double-digit post-earnings increases in seven of its past nine quarters. Options markets are now pricing in a roughly 13% swing following Monday’s results.
“The multiple has always been the hard part of the story,” said Kevin Landis, chief investment officer at Firsthand Capital Management. “There’s real danger in owning an expensive stock if fundamentals start to slow because all the hot money that flowed in can flow out just as quickly.”
Despite trimming his position, Landis remains cautiously optimistic, noting that the only knock against the company is its valuation.
Others echo that sentiment. Tim Pagliara, chief investment officer at Capwealth Advisors, called Palantir a potential global leader in AI software but noted he wouldn’t consider buying the stock above $75 — well below its current level of over $120.
“There’s a case for long-term demand, but the market may be pushing the stock to unsustainable levels,” he said.
Analyst sentiment remains mixed. Nearly 60% of those tracked by Bloomberg rate the stock as a “hold,” and it currently trades more than 25% above the average price target — the widest such gap in the Nasdaq 100.
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