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Here's Why You Should Hold Palantir Technologies Stock Now
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Palantir Technologies Inc. (PLTR - Free Report) stock has rallied 487% in the past year, significantly outperforming the 28.5% growth of the industry.
The company has an impressive Growth Score of A. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of the quality and sustainability of its growth.
The company’s 2025 and 2026 earnings are expected to increase 44% and 25%, respectively, year over year. Sales in 2025 and 2026 are expected to rise 37% and 28%, respectively.
Palantir’s AI strategy is comprehensive, combining its proprietary Foundry and Gotham platforms with a solid plan to promote AI adoption across both government and commercial sectors. Its AI Platform (AIP) is the backbone of these capabilities, enabling organizations to process large datasets and derive real-time insights. This is especially valuable in sectors requiring extensive data integration, such as defense, healthcare, finance and intelligence, where operational efficiency and decision-making speed are critical.
In the government sector, Palantir is aligning its AI strategy with U.S. defense priorities. Its work in high-profile initiatives, such as the Department of Defense’s Open DAGIR project, highlights its ability to modernize military operations through AI-driven solutions where data interoperability and real-time decision-making capabilities are imperative. These capabilities solidify Palantir’s position as a key player in the defense sector.
In the commercial space, Palantir's AIP boot camps — providing hands-on experience to over 1,000 companies — have proven instrumental in customer acquisition. Boot camps showcase the platform’s capabilities and demonstrate its adaptability across logistics, manufacturing and supply chain management. Palantir’s core customer base comprises businesses seeking tailored AI/ML services, particularly large government and corporate clients willing to invest heavily in its systems. This has generated solid revenues, registering a 21.3% CAGR from 2020 to 2024.
Palantir’s modular sales approach expands beyond the core customer base, allowing clients to purchase specific product components instead of committing to the full platform upfront. This model also incorporates usage-based pricing, which lowers the entry barrier for new clients. By starting small, clients can gradually increase spending as they scale their usage of Palantir's solutions. This has expanded its U.S. commercial customer base.
PLTR has a strong balance sheet. Cash and equivalents were $5.4 billion as of Jan. 30, 2025. Since there is no debt, most cash is available for investments in growth initiatives. At the end of the first quarter of 2025, PLTR reported a current ratio of 6.49, way above the industry's average of 2.38. A current ratio above 1 suggests that a company is well-positioned to meet its short-term obligations.
Some Risk
Palantir stock is currently trading at a significantly elevated valuation, which is a major reason some investors are considering selling the stock. The forward price-to-earnings (P/E) ratio stands at an astonishing 191.27, far exceeding the industry average of 36.89. Similarly, the forward price-to-sales (P/S) ratio is 66.79 compared to the industry benchmark of 5.33. These metrics highlight the premium pricing of Palantir shares, suggesting they are significantly overvalued. Historically, such high valuations have often preceded substantial stock price declines. This overvaluation raises concerns about sustainability and prompts some investors to lock in gains or avoid further exposure.
Image: Bigstock
Here's Why You Should Hold Palantir Technologies Stock Now
Palantir Technologies Inc. (PLTR - Free Report) stock has rallied 487% in the past year, significantly outperforming the 28.5% growth of the industry.
The company has an impressive Growth Score of A. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of the quality and sustainability of its growth.
The company’s 2025 and 2026 earnings are expected to increase 44% and 25%, respectively, year over year. Sales in 2025 and 2026 are expected to rise 37% and 28%, respectively.
Palantir Technologies Inc. Price
Palantir Technologies Inc. price | Palantir Technologies Inc. Quote
Key Growth Drivers of PLTR
Palantir’s AI strategy is comprehensive, combining its proprietary Foundry and Gotham platforms with a solid plan to promote AI adoption across both government and commercial sectors. Its AI Platform (AIP) is the backbone of these capabilities, enabling organizations to process large datasets and derive real-time insights. This is especially valuable in sectors requiring extensive data integration, such as defense, healthcare, finance and intelligence, where operational efficiency and decision-making speed are critical.
In the government sector, Palantir is aligning its AI strategy with U.S. defense priorities. Its work in high-profile initiatives, such as the Department of Defense’s Open DAGIR project, highlights its ability to modernize military operations through AI-driven solutions where data interoperability and real-time decision-making capabilities are imperative. These capabilities solidify Palantir’s position as a key player in the defense sector.
In the commercial space, Palantir's AIP boot camps — providing hands-on experience to over 1,000 companies — have proven instrumental in customer acquisition. Boot camps showcase the platform’s capabilities and demonstrate its adaptability across logistics, manufacturing and supply chain management. Palantir’s core customer base comprises businesses seeking tailored AI/ML services, particularly large government and corporate clients willing to invest heavily in its systems. This has generated solid revenues, registering a 21.3% CAGR from 2020 to 2024.
Palantir’s modular sales approach expands beyond the core customer base, allowing clients to purchase specific product components instead of committing to the full platform upfront. This model also incorporates usage-based pricing, which lowers the entry barrier for new clients. By starting small, clients can gradually increase spending as they scale their usage of Palantir's solutions. This has expanded its U.S. commercial customer base.
PLTR has a strong balance sheet. Cash and equivalents were $5.4 billion as of Jan. 30, 2025. Since there is no debt, most cash is available for investments in growth initiatives. At the end of the first quarter of 2025, PLTR reported a current ratio of 6.49, way above the industry's average of 2.38. A current ratio above 1 suggests that a company is well-positioned to meet its short-term obligations.
Some Risk
Palantir stock is currently trading at a significantly elevated valuation, which is a major reason some investors are considering selling the stock. The forward price-to-earnings (P/E) ratio stands at an astonishing 191.27, far exceeding the industry average of 36.89. Similarly, the forward price-to-sales (P/S) ratio is 66.79 compared to the industry benchmark of 5.33. These metrics highlight the premium pricing of Palantir shares, suggesting they are significantly overvalued. Historically, such high valuations have often preceded substantial stock price declines. This overvaluation raises concerns about sustainability and prompts some investors to lock in gains or avoid further exposure.
Zacks Rank and Stocks to Consider
PLTR currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks are AppLovin (APP - Free Report) , sporting a Zacks Rank #1 (Strong Buy) and Conduent (CNDT - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AppLovin has a long-term earnings growth expectation of 20%. APP delivered a trailing four-quarter earnings surprise of 22.9%, on average.
Conduent has a long-term earnings growth expectation of 8%. CNDT delivered a trailing four-quarter earnings surprise of 5.9%, on average.