"One of the most divisive stocks on the market, with some of the most ardent bulls and bears on opposing sides, has to be Palantir ( NASDAQ:PLTR). Shares of the big data and AI company ended 2025 up more than 120%, as investors looking to capitalize on the AI trade have benefited from holding PLTR stock through the noise. Of course, now the question remains whether this momentum can be sustained in 2026,"
"For starters, my bearish thesis around Palantir given its elevated valuation is well-known. Plaantir is a stock that's now trading at an extreme premium to the market, which I'd argue is overvalued right now. At 166-times forward earnings and more than 100-times sales, Palantir's valuation is well outside of the realm of reality, at least that's my view. For those with an eye on fundamentals and are trying to piece together what would need to happen in order for Palantir to double"
Palantir shares rose more than 120% in 2025 as investors sought exposure to the AI trade. Rapid commercial growth now complements a robust government business, producing improved earnings, cash flow, and impressive revenue expansion. The sustainability of that momentum depends on continued corporate spending, a favorable capex cycle, and the extent of any regulatory pressure. Current market pricing reflects an extreme premium, with forward earnings around 166-times and sales exceeding 100-times. Achieving the growth required to justify this valuation would be mathematically difficult. Some investors may choose to sit on the sidelines given elevated risk.
Read at 24/7 Wall St.
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