Palantir Technologies (PLTR) has seen a 97% surge in its stock price in 2025, driven by the adoption of its AI platform in government and commercial sectors. However, concerns about its high valuation exist, with a forward P/E ratio of 255.32 and a price-to-sales ratio of 90.0.

Despite the valuation concerns, Mizuho analysts upgraded PLTR to “Neutral” from “Underperform,” recognizing its high multiple. The price target was raised to $135 from $116, indicating a discount to the current price. Mizuho sees growth potential in Palantir’s public sector pipeline and commercial relevance.

In Q1 2025, Palantir reported a 39% revenue increase, with U.S. commercial revenue up by 71%. The company’s government segment also showed strength, with a 45% revenue growth. Palantir’s strategic moves, like expanding contracts with the Pentagon and partnerships with Accenture Federal Services, have boosted its market position.

Palantir is set to announce its Q2 earnings in August, with analysts expecting an EPS of $0.08 and a 36% revenue growth forecast for the full year. The company’s growth potential has garnered mixed opinions from Wall Street analysts, with some seeing it as “the next Oracle.”

Investors are cautious about Palantir’s premium valuation and potential for a correction despite its promising long-term prospects. The company’s focus on AI and government contracts presents growth opportunities, but the high valuation poses risks for investors.

Read more at Yahoo Finance: Palantir Stock Just Scored a Rare Upgrade Ahead of Earnings, Here’s Why