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Business Insider
12-08-2025
- Business
- Business Insider
This Is What Analysts Say Palantir (PLTR) Must Do to Justify Its Sky-High Valuation
AI firm Palantir Technologies (PLTR) has been on a remarkable run, with shares hitting another record high on Friday and total gains since its 2020 debut nearing 2,500%. The stock is up nearly 150% this year due to its growing use of artificial intelligence, strong relationships with the U.S. government, and an impressive earnings report. As a result, this surge has made Palantir one of the most expensive companies in the S&P 500 (SPY), trading at about 245 times its expected earnings, far higher than other big winners like Nvidia (NVDA), which trades at 35 times. As Morningstar's (MORN) Mark Giarelli told Bloomberg, Palantir is 'a great company,' but its sky-high valuation 'causes heartburn' for investors. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Unsurprisingly, some analysts say that the numbers needed to justify this valuation are staggering. For example, Bloomberg Intelligence's Damian Reimertz estimates that Palantir would have to generate $60 billion in revenue over the next year to trade at a valuation similar to its peers. That's many times more than the $4 billion Wall Street expects in 2025 or the $5.7 billion forecast for 2026. Separately, DA Davidson's five-star-rated Gil Luria stated that Palantir would require 50% yearly growth for the next five years, along with 50% profit margins, to bring its valuation down to levels seen in companies like Microsoft (MSFT). While earnings are expected to grow 56% this year, growth rates are forecast to slow down to 31% and 33% in the following two years. Even with these challenges, many investors are holding onto the stock, unwilling to risk missing more gains. But history shows that stocks trading at lofty valuations can fall hard when results disappoint. For investors, Palantir's situation is clear: its growth story is still strong, but the high price tag means that there is little room for error, thereby making future earnings reports especially important. Is PLTR Stock a Buy? Turning to Wall Street, analysts have a Hold consensus rating on PLTR stock based on five Buys, 13 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average PLTR price target of $154.56 per share implies 17.1% downside risk.
Yahoo
11-08-2025
- Business
- Yahoo
PLTR: Palantir Becomes S&P 500's Priciest Stock as AI Mania Peaks
Aug 11 - Palantir Technologies (NASDAQ:PLTR) has been on a tear in 2025, soaring nearly 150% this year and an incredible 2,000% since its 2020 debut. The stock just closed at another record, making it the priciest name in the S&P 500. Investors are betting big on Palantir's AI-fueled growth, lucrative government contracts, and strong earnings. But with the stock trading at 245 times forward earnings, compared to Nvidia's (NASDAQ:NVDA) 35, some analysts are growing uneasy. It's a great company, Morningstar's Mark Giarelli said, but the valuation causes heartburn. Bloomberg Intelligence estimates Palantir would need $60 billion in annual revenue to match peer valuations, far above its $4 billion forecast for 2025. DA Davidson's Gil Luria says sustaining 50% annual growth for five years would be required to bring multiples closer to Microsoft (NASDAQ:MSFT) and AMD (NASDAQ:AMD). Palantir's meteoric rise is reflect of AI sector cheeriness, but valuation leaves very little space for mistakes. Unless growth gets a huge acceleration the stock is going to be subject to sharp pullbacks whenever sentiment changes. What Do Analysts Think About PLTR Stock? Based on the one year price targets offered by 21 analysts, the average target price for Palantir Technologies Inc is $152.19 with a high estimate of $200.00 and a low estimate of $45.00. The average target implies a downside of -18.60% from the current price of $186.96. Based on the consensus recommendation from 25 brokerage firms, Palantir Technologies Inc's (NASDAQ:PLTR) average brokerage recommendation is currently 2.8, indicating a "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
11-08-2025
- Business
- Yahoo
PLTR: Palantir Becomes S&P 500's Priciest Stock as AI Mania Peaks
Aug 11 - Palantir Technologies (NASDAQ:PLTR) has been on a tear in 2025, soaring nearly 150% this year and an incredible 2,000% since its 2020 debut. The stock just closed at another record, making it the priciest name in the S&P 500. Investors are betting big on Palantir's AI-fueled growth, lucrative government contracts, and strong earnings. But with the stock trading at 245 times forward earnings, compared to Nvidia's (NASDAQ:NVDA) 35, some analysts are growing uneasy. It's a great company, Morningstar's Mark Giarelli said, but the valuation causes heartburn. Bloomberg Intelligence estimates Palantir would need $60 billion in annual revenue to match peer valuations, far above its $4 billion forecast for 2025. DA Davidson's Gil Luria says sustaining 50% annual growth for five years would be required to bring multiples closer to Microsoft (NASDAQ:MSFT) and AMD (NASDAQ:AMD). Palantir's meteoric rise is reflect of AI sector cheeriness, but valuation leaves very little space for mistakes. Unless growth gets a huge acceleration the stock is going to be subject to sharp pullbacks whenever sentiment changes. What Do Analysts Think About PLTR Stock? Based on the one year price targets offered by 21 analysts, the average target price for Palantir Technologies Inc is $152.19 with a high estimate of $200.00 and a low estimate of $45.00. The average target implies a downside of -18.60% from the current price of $186.96. Based on the consensus recommendation from 25 brokerage firms, Palantir Technologies Inc's (NASDAQ:PLTR) average brokerage recommendation is currently 2.8, indicating a "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Straits Times
11-08-2025
- Business
- Straits Times
Palantir's 2,500% stock rally has bulls scrambling to justify valuation
Shares of the defense maker closed at another all-time high on Aug 8, bringing gains since its 2021 debut to near 2,500 per cent. NEW YORK – Palantir Technologies' meteoric rise is pushing the company's valuation further into record territory, forcing bullish investors to bank on increasingly robust future growth to justify its current level. Shares of the defense maker closed at another all-time high on Friday (Aug 8), bringing gains since its 2021 debut to near 2,500 per cent. The stock is up almost 150 per cent in 2025, a rally underpinned by the company's growing use of artificial intelligence, business ties to the US government and most recently, a stellar earnings report. That surge has made Palantir eye-wateringly expensive compared to its peers: trading at 245 times forward earnings, it is the most richly-valued company in the S&P 500 Index. By comparison, chipmaker Nvidia, another big gainer, trades at just 35 times forward earnings. Palantir is 'turning into a bit of a difficult valuation story to sell, but it's a great company,' said Mark Giarelli of Morningstar Investment Service, who has sell-equivalent rating on the stock. The valuation 'causes heartburn, but that's the story right now.' Plenty of Wall Street pros and retail investors alike are happy to hang on for now, wary of missing out on further upside. Still, it's getting hard for them to ignore the increasingly high bar Palantir must meet to justify its performance over the longer term. Damian Reimertz of Bloomberg Intelligence estimates the company would need to generate US$60 billion (S$77 billion) over the next 12 months to trade at a comparable valuation to its peers. That calculation – based on a comparison of the software companies' enterprise value-to-sales ratio – is many times higher than the US$4 billion in revenues Wall Street expects Palantir to earn in fiscal 2025 or the US$5.7 billion analysts forecast for next year. Valuation is also a sticking point for Gil Luria, managing director and head of technology research at DA Davidson & Co. Mr Luria praised Palantir's quarterly results and called it 'the best story in all of software' in a recent note. Top stories Swipe. Select. Stay informed. Business Keppel to sell M1 unit's telco business to Simba for $1.43 billion Business Nvidia, AMD agree to pay 15% of China chip sale revenues to US: Sources Singapore Healthy lifestyle changes could save Singapore $650 million in healthcare costs by 2050: Study Singapore BTO income ceiling, age floor for singles being reviewed: Chee Hong Tat World Netanyahu says Israel's new Gaza offensive will start soon Opinion Anwar's government: Full house but plenty of empty offices Singapore Man's claim amid divorce that his mother is true owner of 3 properties cuts no ice with judge Business Singapore can deliver and thrive in a fragmented global economy: Morgan Stanley analysts But he estimates that the company would have to grow at 50 per cent annually for the next five years and maintain a 50 per cent margin in order to get its forward price to earnings ratio down to 30, in line with the likes of Microsoft and Advanced Micro Devices. In a broader sign of Wall Street's unease, more than twice as many analysts assign the stock sell or hold ratings than buy, according to data compiled by Bloomberg. Still, Palantir's shares have become a must-own for portfolio managers concerned with beating performance benchmarks, said David Wagner of Aptus Capital Advisors, which holds shares of the company. 'There's a lot of investors that just can't ignore it,' said Mr Wagner. 'They don't believe in the stock, but they're tired of it just hurting them on a relative performance standpoint.' 'Squint your eyes' Palantir bulls are betting that the company's business performance will support its stock price over the long term, a path taken by many of today's Big Tech elite. Online streamer Netflix, for instance, traded north of 280 times forward earnings at a 2015 peak, and now stands at a forward P/E of 40. 'Definitely Palantir is part of that AI craze, but not everything that goes to a valuation of 200 is a bubble,' said Que Nguyen, chief investment officer of equity strategies at Research Affiliates, referring to Netflix. Brent Bracelin at Piper Sandler boosted his price target on shares to US$182 from US$170 following earnings and maintained his overweight rating. He is counting on the company to continue growing aggressively and sustain high free cash flow margins through 2030, aided by a market for defense spending estimated at US$1 trillion in the US alone. 'You have to squint your eyes. You kind of have to believe that these audacious growth goals can be achieved,' he said. BLOOMBERG
Business Times
10-08-2025
- Business
- Business Times
Palantir's 2,500% run has bulls scrambling to justify valuation
[NEW YORK] Palantir Technologies' meteoric rise is pushing the company's valuation further into record territory, forcing bullish investors to bank on increasingly robust future growth to justify its current level. Shares of the defence maker closed at another all-time high on Friday (Aug 8), bringing gains since its 2021 debut to nearly 2,500 per cent. The stock is up almost 150 per cent this year, a rally underpinned by the company's growing use of artificial intelligence (AI), business ties to the US government and most recently, a stellar earnings report. That surge has made Palantir eye-wateringly expensive compared to its peers: trading at 245 times forward earnings, it is the most richly valued company in the S&P 500 Index. By comparison, chipmaker Nvidia, another big gainer, trades at just 35 times forward earnings. Palantir is 'turning into a bit of a difficult valuation story to sell, but it's a great company', said Mark Giarelli of Morningstar Investment Service, who has a sell-equivalent rating on the stock. The valuation 'causes heartburn, but that's the story right now'. Plenty of Wall Street pros and retail investors alike are happy to hang on for now, wary of missing out on further upside. Still, it's getting hard for them to ignore the increasingly high bar Palantir must meet to justify its performance over the longer term. Damian Reimertz of Bloomberg Intelligence estimates the company would need to generate US$60 billion over the next 12 months to trade at a comparable valuation to its peers. That calculation, based on a comparison of the software companies' enterprise value-to-sales ratio, is many times higher than the US$4 billion in revenues Wall Street expects Palantir to earn in fiscal 2025 or the US$5.7 billion analysts forecast for next year. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Valuation is also a sticking point for Gil Luria, managing director and head of technology research at DA Davidson. Luria praised Palantir's quarterly results and called it 'the best story in all of software' in a recent note. But he estimates that the company would have to grow at 50 per cent annually for the next five years and maintain a 50 per cent margin in order to get its forward price to earnings ratio down to 30, in line with the likes of Microsoft and Advanced Micro Devices. Palantir's adjusted earnings per share are expected to grow at a 56 per cent rate this year, falling to 31 per cent and 33 per cent in the next two years, respectively. In a broader sign of Wall Street's unease, more than twice as many analysts assign the stock sell or hold ratings than buy, according to data compiled by Bloomberg. Still, Palantir's shares have become a must-own for portfolio managers concerned with beating performance benchmarks, said David Wagner of Aptus Capital Advisors, which holds shares of the company. 'There's a lot of investors that just can't ignore it,' said Wagner. 'They don't believe in the stock, but they're tired of it just hurting them on a relative performance standpoint.' 'Squint your eyes' Palantir bulls are betting that the company's business performance will support its stock price over the long term, a path taken by many of today's Big Tech elite. Online streamer Netflix, for instance, traded north of 280 times forward earnings at a 2015 peak, and now stands at a forward P/E of 40. 'Definitely Palantir is part of that AI craze, but not everything that goes to a valuation of 200 is a bubble,' said Que Nguyen, chief investment officer of equity strategies at Research Affiliates, referring to Netflix. Brent Bracelin at Piper Sandler boosted his price target on shares to US$182 from US$170 following earnings and maintained his overweight rating. He is counting on the company to continue growing aggressively and sustain high free cash flow margins to 2030, aided by a market for defence spending estimated at US$1 trillion in the US alone. 'You have to squint your eyes. You kind of have to believe that these audacious growth goals can be achieved,' he said. Of course, there are numerous examples of stock rallies that cooled when companies could not meet Wall Street's elevated expectations. Shares of Tesla are down nearly 20 per cent this year, in part because the company's results are not keeping pace with its lofty valuation of about 148 times forward earnings. While Palantir aced its most recent earnings report, its high valuation could exacerbate a selloff if the company stumbles in the future, said Morningstar's Giarelli. 'Palantir is trading at such a high multiple relative to everyone else that there's just so much gravity underneath their stock chart,' he said. 'There's a lot of room below the stock chart for it to reprice in a negative way because it's had such a stellar run.' For Mark Malek, chief investment officer at Siebert Financial, valuations remain a concern. Still, Palantir's potential for growth has kept him holding on to the stock. 'It's uncomfortable to buy it at these levels, but we're not afraid to buy when stocks are overvalued,' he said. 'Where else are you finding 30 per cent growth rates out there?' BLOOMBERG
