From Yahoo Finance: 2025-05-10 13:49:00

Palantir Technologies has seen its stock soar by 361% over the past year, making it one of the most popular AI stocks. However, its price-to-sales ratio is about 91, more than double what leading tech players traded at during periods of stock market euphoria.

Historical comparisons with companies like Cisco, Amazon, and Nvidia suggest that Palantir’s valuation is overstretched. While the AI sector is not in a bubble, investors should consider the opportunity cost of investing in Palantir at a historically high valuation.

Investors should weigh the potential for Palantir to eclipse its current market value of $250 billion against the evidence suggesting it may trade at more reasonable prices in the future. Dollar-cost averaging and a long-term investment horizon could be the best strategy for those looking to build a position in the company.

Read more: After Soaring 361% in Just 1 Year, Can Palantir Stock Keep Climbing? History Offers a Clear Answer.