From Yahoo Finance: 2025-04-01 06:30:00

Palantir Technologies (NASDAQ: PLTR) has seen a 400% increase in its stock since the beginning of 2024, with a 10% rise this year. Despite this, caution is advised as a potential downturn may be on the horizon due to overvaluation concerns.

Palantir’s revenue has steadily increased since 2024, with a 36% growth expected in the first quarter. However, the stock’s valuation, trading at 77 times sales, suggests overvaluation compared to the business growth rate, raising red flags for investors.

The stock’s growth is heavily priced in, requiring substantial revenue increases to justify its current value. With the stock at 77 times sales, sustained rapid growth is necessary, making it a risky investment choice.

Palantir Technologies may need to triple its revenue year over year to justify its valuation. The company’s success is already factored into the stock price, making it a less attractive investment option, despite its strong growth potential.

The Motley Fool Stock Advisor team did not include Palantir Technologies in their list of top 10 stocks for investors, citing potential for higher returns elsewhere. Past recommendations like Nvidia have shown significant growth potential, emphasizing the importance of selecting the right investments.

Financial analyst Keithen Drury does not hold any positions in the mentioned stocks. The Motley Fool has positions in and recommends Palantir Technologies, emphasizing a transparent disclosure policy to investors.



Read more at Yahoo Finance: Here’s Why I’m Avoiding Palantir Technologies Stock