Aug 11 – Palantir Technologies (NASDAQ:PLTR) has been on a tear in 2025, soaring nearly 150% this year and an incredible 2,000% since its 2020 debut. The stock just closed at another record, making it the priciest name in the S&P 500.
Investors are betting big on Palantir’s AI-fueled growth, lucrative government contracts, and strong earnings. But with the stock trading at 245 times forward earnings, compared to Nvidia’s (NASDAQ:NVDA) 35, some analysts are growing uneasy. It’s a great company, Morningstar’s Mark Giarelli said, but the valuation causes heartburn.
Bloomberg Intelligence estimates Palantir would need $60 billion in annual revenue to match peer valuations, far above its $4 billion forecast for 2025. DA Davidson’s Gil Luria says sustaining 50% annual growth for five years would be required to bring multiples closer to Microsoft (NASDAQ:MSFT) and AMD (NASDAQ:AMD).
Palantir’s meteoric rise is reflect of AI sector cheeriness, but valuation leaves very little space for mistakes. Unless growth gets a huge acceleration the stock is going to be subject to sharp pullbacks whenever sentiment changes.
Based on the one year price targets offered by 21 analysts, the average target price for Palantir Technologies Inc is $152.19 with a high estimate of $200.00 and a low estimate of $45.00. The average target implies a downside of -18.60% from the current price of $186.96.
Based on the consensus recommendation from 25 brokerage firms, Palantir Technologies Inc’s (NASDAQ:PLTR) average brokerage recommendation is currently 2.8, indicating a “Hold” status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
This article first appeared on GuruFocus.