Shares of Palantir Technologies (PLTR) have taken a big leap from trading at just below $20 per share at the start of 2024 to surging over $110 in 2025. Palantir’s stock seems unstoppable at the moment, driven by continued excitement around AI (artificial intelligence) and impressive Q4 results. Looking ahead, Palantir’s optimistic 2025 outlook and advancements in AI are expected to sustain the growth of the company. However, due to high valuation concerns, it may be better to wait for a price dip before investing.
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Palantir Positioned for Major Growth
Palantir is experiencing steady growth in its software business, serving both government agencies and commercial clients. The growing optimism surrounding the company’s future is fueled by its accelerating revenue growth and vast addressable market. Earlier this month, the company reported a 36% year-over-year increase in Q4 revenues, reaching $828 million.
Interestingly, Palantir’s commercial sector is sparking the most investor enthusiasm. In Q4 2024, U.S. commercial revenue surged 64% year-over-year, outpacing the 45% increase in government revenue. For 2025, Palantir expects its U.S. commercial sales to grow by at least 54%, reaching approximately $1.08 billion.
Additionally, Palantir closed 129 deals in Q4 worth over $1 million each, up from 104 in Q3. This is mainly because companies are saving real money using Palantir’s AI. Consequently, analysts believe Palantir, as a key provider of AI-powered software, is well-positioned to be a major player in driving AI advancements and boosting productivity.
Is Palantir a Good Buy Right Now?
The only downside to Palantir’s positive outlook is its valuation. Palantir’s shares are currently trading at very high multiples of revenue, free cash flow, and earnings, making it challenging to justify these valuations over time. Notably, the company’s market cap has surged to $252 billion as of writing.
While stocks may outperform business fundamentals in the short term, they are unlikely to maintain that momentum long-term. Therefore, it could be wise to hold off on buying and wait for a sell-off before investing in PLTR stock.
What is the Target Price for Palantir?
Overall, Wall Street has a Hold consensus rating on PLTR stock, based on two Buys, 10 Holds, and five Sell recommendations. The average share price target for Palantir is $88.60, which implies a downside potential of 24% from current levels.
Year-to-date, PLTR stock has surged 54.24%, making it the top performer in the S&P 500.
