Palantir Technologies (NASDAQ:PLTR) has achieved a remarkable milestone, surpassing Salesforce (NYSE:CRM) in market capitalization to become the 10th most valuable technology company in the United States. The data analytics and artificial intelligence specialist now commands a market cap of approximately $291 billion, overtaking Salesforce’s $262 billion valuation.
PLTR stock price is up almost 500% in the last 12 months and a monstrous 1,200% since its initial public offering in September 2020. The ongoing rally reflects investor enthusiasm for Palantir’s AI-driven platforms, Foundry and Gotham, which serve commercial and government clients.
Palantir’s strong fundamentals have supported its outsized gains. For instance, the company’s revenue increased from $742.5 million in 2019 to $2.86 billion in 2024. Moreover, it ended 2024 with adjusted earnings per share of $0.41, up from $0.19 in 2020.
However, PLTR stock price trades at a premium valuation and is quite expensive, making it a high-risk investment right now. Let’see why.
The Bull Case for Palantir (NASDAQ:PLTR) Stock
Palantir reported exceptional first-quarter results that underscore its dominance in enterprise AI applications. In Q1 of 2025, its revenue surged 39% year-over-year to $884 million, exceeding guidance by 350 basis points.
Palantir’s U.S. business momentum remains extraordinary, with domestic revenue growing 55% year over year to account for 71% of the total business.
The standout performance came from Palantir’s U.S. commercial segment, which achieved a $1 billion annual run rate for the first time while posting a remarkable 71% year-over-year growth.
This acceleration reflects intensifying demand for the company’s AI Platform (AIP), which enables enterprises to deploy artificial intelligence agents for autonomous business operations.
Management highlighted rapid customer expansion cycles, with companies converting from pilot programs to multi-million-dollar engagements within months.
Palantir’s foundational government business maintained strong momentum with 45% year-over-year growth, bolstered by expanded Department of Defense contracts and the successful deployment of Maven Smart System across military commands.
Notably, NATO adopted Maven as its command-and-control operating system, extending Palantir’s reach across 32 member states. The company delivered its first TITAN military vehicles on schedule, demonstrating execution capabilities beyond traditional software.
Palantir’s Exceptional Profitability Metrics
Palantir achieved a Rule of 40 score of 83, exceeding industry benchmarks by combining rapid growth with 44% adjusted operating margins.
Palantir’s score of 83 exceeds the 40% industry benchmark for SaaS companies, demonstrating exceptional financial performance. The metric combines revenue growth rate and operating margin, with scores above 40% considered strong.
Palantir’s score of 83, more than double the threshold, reflects an ability to expand revenue while maintaining high profitability and operational efficiency. This positions Palantir among top-tier software performers in balancing growth with margins.
The performance reflects Palantir’s ability to monetize its differentiated Ontology platform, uniquely translating large language model capabilities into quantifiable business outcomes.
Strong Financial Position and Outlook
Management raised full-year 2025 revenue guidance to $3.896 billion, representing 36% growth, while U.S. commercial revenue guidance increased to exceed $1.178 billion with at least 68% growth. The company generated $370 million in adjusted free cash flow and maintains $5.4 billion in cash reserves.
CEO Alex Karp emphasized Palantir’s transformation from “freak show” to essential enterprise partner, noting reduced resistance as organizations embrace AI-driven transformation. With 90% of business outside struggling European markets growing 49% year-over-year, Palantir appears well-positioned to capitalize on accelerating enterprise AI adoption while maintaining its competitive moat through proprietary Ontology technology.
What is the Average PLTR Stock Price Target?
Analysts tracking Palantir stock expect sales to rise from $2.86 billion in 2024 to $12.45 billion in 2029, indicating a compounded annual growth rate of 34%. Comparatively, adjusted earnings are forecast to expand from $0.41 in 2024 to $2.04 per share, an annual growth rate of almost 38%.
While the AI tech stock continues to grow at an enviable pace, investors are worried about its lofty multiple. PLTR stock currently trades at a forward price-to-earnings multiple of 200x, compared to its five-year average of 101.5x.
If the NASDAQ-listed tech stock is priced at 75x forward earnings (which is 2x its earnings growth), it should trade around $153 in early 2029, indicating an upside potential of 24% from current levels.
As we can see above, Palantir has a Ziggma score of 86 but is rated relatively low in valuation. Alternatively, a debt-free balance sheet and an expanding addressable market make PLTR stock attractive to investors with a low to high risk appetite.
Out of the 27 analysts tracking Palantir stock, four recommend “Buy”, 17 recommend “Hold”, and six recommend “Sell”. The average PLTR stock price target is $96.6, lower than the current target price of $123.3.
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FAQs
Is PLTR stock undervalued?
No, according to consensus estimates, Palantir (NASDAQ:PLTR) stock is overvalued.
What is the PLTR stock price forecast?
Analysts have a PLTR stock price forecast of $96, below the current trading price of $123.
What is the PLTR stock price today?
The PLTR stock price today is $123.31
We believe the information contained in this text to be reliable but do not warrant its accuracy or completeness. Opinions, estimates, and investment strategies and views expressed in this document constitute our judgment based on current market conditions available data and are subject to change without notice. Please consider your full financial situation prior to making an investment decision. The author currently holds shares in HPE.