Staff Reporter
Palantir Technologies (PLTR) has seen its stock price skyrocket by 550% since January 2024, making it the top performer in the S&P 500 and the second-best in the Nasdaq-100 during this timeframe.
This remarkable rise is largely attributed to a string of impressive financial results.
As a leader in artificial intelligence (AI) platforms, Palantir has captured the attention of retail investors. However, it currently holds the title of the most expensive software stock on the market by a significant margin.
According to Louie DiPalma from William Blair Research, Palantir’s valuation stands at 64 times its 2026 consensus sales.
In contrast, CrowdStrike, the second-highest in software valuation, sits at just 18 times. This suggests that Palantir could drop by 70% and still retain its position as the priciest software stock based on its forward price-to-sales ratio.
Palantir’s valuation is also striking when looking at trailing 12-month sales, having reached 107 times sales in February.
It recently rebounded to 100 times sales in early May, with its peak share price hitting $125 on February 18, 2025. If historical trends hold, the stock could fall to $23.75, representing an 81% decline from its current price of $110.
Dan Ives from Wedbush believes Palantir could transform into a trillion-dollar company, but many analysts are cautious about the stock’s immediate future.
Palantir recently reported strong first-quarter results, with customer numbers rising by 39% to 769 and average spending per customer increasing by 124%.
Revenue climbed 39% to $884 million, marking the seventh consecutive quarter of growth, while non-GAAP earnings jumped 62% to $0.13 per diluted share.
Despite these positive results, the stock experienced a sell-off, likely due to valuation concerns. Ives made a bold prediction during a CNBC interview, stating, “I believe this is going to a trillion-dollar market cap in the next two to three years,” suggesting a potential 285% upside from its current market value of $260 billion.
However, among the 27 analysts covering Palantir, the median 12-month target price is $98 per share, indicating an 11% downside from the current price. The lowest target of $40 per share suggests a possible 64% decline.
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