Palantir stock has surged 92%, with high valuation and caution from analysts

From Yahoo Finance: 2025-06-25 10:41:00

Palantir Technologies (PLTR) has surged as the top-performing S&P 500 stock, rising over 92% year-to-date and 490% in the past year. Despite its high valuation, the market believes in Palantir’s AI capabilities, positioning, and potential growth. Analysts, however, caution that the stock’s current price may not be sustainable.

Palantir’s valuation is exceptionally high, with a price-sales ratio of 115.23x, far surpassing industry averages and even larger tech companies like Alphabet and Microsoft. This extreme valuation suggests the market is pricing in substantial future growth, leaving little room for operational missteps.

Palantir’s financial performance remains strong, with revenue reaching $884 million in Q1 2025, a 39% increase year-over-year. The company’s U.S. commercial revenue and customer base are growing rapidly, driven by demand for its Artificial Intelligence Platform. Government contracts also contribute significantly to its revenue.

Despite its impressive growth narrative and market enthusiasm, analysts maintain a cautious “Hold” rating on Palantir stock. The current average price target of $104.94 implies a potential downside from current levels, reflecting concerns over the stock’s high valuation and sustainability.

Read more: Up 93% in 2025, Palantir Stock Is Too Hot to Handle Here