Top 3 Wall Street insights on Palantir amid its sizzling start to 2025
7 Februari 2025
0 4 minutes read
Palantir’s (PLTR) stock is picking up where it left off in 2024.
On a tear.
Shares of the AI software play led by outspoken CEO Alex Karp have exploded 41% year to date, dusting the 3% advance for the Nasdaq Composite (^IXIC). Shares rose 5% on Thursday to a fresh record.
The stock has crushed all components of the often hot Magnificent Seven — the top performer in the group this year is Meta (META) with a 20% jump.
“The company is on a hell of a roll right now,” one Wall Street analyst told me.
Palantir’s financial roll underscores the enthusiasm pushing its stock to meteoric heights.
The company reported on Feb. 3 that fourth quarter US revenue surged 52% from the prior year. Sales to commercial and government clients rose 64% and 45% year over year, respectively. Adjusted operating profit margins soared to 45% from 34% a year ago.
Adjusted operating profits almost doubled in 2024 to $1.13 billion.
“We at the end of the day at Palantir are exporting our culture and way of doing things to enterprises, especially in America, by allowing enterprises to capture their tribal knowledge in a way that they can utilize large language models,” Karp crowed to analysts on an earnings call.
He later added, “We believe we are making America more lethal, making our adversaries increasingly afraid of acting against the interests of America and especially Americans and we are proud of our moral stance and we are very long on the US and what’s happening and what will happen in the future.”
Since Palantir reported results, Yahoo Finance data shows there have been several upward revisions to EPS expectations for 2025 and 2026 by Wall Street analysts.
Interestingly, only one of the 11 analysts who rate the stock a Neutral or Underperform and published reports post earnings lifted their rating on Palantir (Morgan Stanley to Equal Weight from Under Weight). The lone Buy rating was a reiteration by Bank of America, according to Yahoo Finance data.
The Street’s skepticism on Palantir shares continue to center on its super premium valuation versus peers and high volatility, experts have told us. Shares trade on an outsized forward PE ratio of 181 times, for instance. By comparison, Nvidia (NVDA) trades at 29 times estimated forward earnings.
“I believe this could be the next Oracle or Salesforce — that’s my view relative to where Palantir is going to be over the next three to five years,” Wedbush analyst Dan Ives said on Yahoo Finance’s Market Domination.
Yahoo Finance scoured the digital piles of Wall Street research for Palantir following earnings this week. Here are three views on the company and stock we found most useful to investor thinking.
Palantir’s valuation isn’t too crazy after all, says Morgan Stanley analyst Sanjit Singh. In fact, he makes the case it’s justified given the rarity of Palantir’s growth story in software:
“Market is willing to pay up for the scarce achievement of 30% growth. In our recent assumption of coverage note, Winning the Early Rounds of AI, but Valuation Premium Negatively Skews Risk/Reward, we noted that Palantir was executing well in this early stage of the AI cycle given a strong technology platform and elite engineering talent. That said, our concerns on valuation at ~50 times calendar year sales and on the potential for slower growth in 2025 given tougher year over year compares suggested that the risk/reward was unattractive leading to our underweight rating. However, one of the key principles of growth investing in software is before looking to valuation, to first assess whether the business is getting better or worse and, if getting better, to ask how durable that improvement is going forward. Against this backdrop, it is clear that the business got better in the fourth quarter.”
Still, Palantir’s valuation is a lot to digest.
Despite its financials, Palantir’s stock valuation likely gives analysts a pause. Gil Luria at DA Davidson is in that camp, though he lifted his price target to stay in line with where the stock is trading:
“We believe Palantir is the best story in all of software. We have updated our estimates in line with guidance and remain positive on the company overall. Palantir scores in the top decile of our coverage on Rule of X. However, the stock price trades at about 67 times calendar year revenue, an unprecedented premium to any peer. We maintain our Neutral rating but raise our price target to $105, from $47, based on ~67x our CY25 revenue estimate.”
Not everyone is sold on the sustainability of Palantir’s business.
RBC Capital Markets analyst Rishi Jaluria is one of the more bearish names on Palantir. He doesn’t appear to be a valuation worrier, instead voicing concern on the sustainability of recent results.
Jaluria’s $40 price target assumes Palantir’s stock will crash 68% from current levels:
“Palantir reported a solid quarter and set 2025 guidance ahead of consensus, leading shares up 23% after-hours [on earnings day] — somewhat bolstered by retail investors supporting the stock. Overall, both Government and Commercial results were better than expectations, but our concerns about the runway for growth and product differentiation remain. While 2025 numbers move higher on guidance well ahead of consensus, we question conservatism. Putting that together, we raise our price target to $40 on higher estimates and improved profitability, but we continue see the risk-reward skewing unfavorable with shares trading at a premium multiple.”
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Brian Sozzi is Yahoo Finance’s Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
