Palantir (PLTR) stock has surged 75% year to date, but caution advised due to high valuation.

From Nasdaq: 2025-07-03 13:28:00

Palantir Technologies Inc. (PLTR) has surged 75% year to date, outpacing the industry and S&P 500. The focus now is on whether it’s wise to enter now or wait for a potential pullback. Image Source: Zacks Investment Research

Palantir’s Artificial Intelligence Platform (AIP) is driving growth, with U.S. commercial revenues up 71% YoY. AIP bootcamps accelerate adoption, offering production-ready AI solutions. Competitors like Microsoft, Google, and Salesforce are also ramping up AI initiatives, but Palantir’s focus on mission-critical sectors gives it a competitive edge in operational AI.

Palantir boasts a strong financial foundation, with $5.4 billion in cash and zero debt. First-quarter sales grew 39.3% YoY, with 139 deals worth over $1 million closed. Earnings momentum remains robust, with Q2 2025 EPS estimated to jump 55.6% YoY and full-year earnings forecasted to grow 41.5%.

Despite its strong performance, Palantir’s valuation at a forward P/E of 202 poses a challenge. This high multiple reflects lofty expectations around AI monetization and government contracts. Investors are advised to proceed with caution and avoid chasing the stock at its current valuation levels.

Verdict: Hold your ground with Palantir, but exercise caution. Long-term investors should maintain positions, but new entrants may benefit from waiting for a more favorable entry point post-pullback. PLTR currently carries a Zacks Rank #3 (Hold).

Check out Zacks Investment Research for more insights and stock recommendations.



Read more at Nasdaq: PLTR Stock Rises 75% Year to Date: Still a Buy, or Time to Wait?