NEW YORK, May 26, 2026, 12:05 EDT
- Palantir traded higher late morning, though the stock is still lagging the wider software bounce in 2026.
- Fresh commentary split on Palantir. Some point to the company’s fast AI-fueled growth, others see valuation as a worry.
- One investor note pointed to PayPal as a lower-priced cash-flow play. Anthropic’s focus on enterprise was also flagged, landing it on the competitive watch list.
Palantir Technologies shares ticked up on Tuesday, but a series of new investor comments pulled attention to the company’s valuation again. That comes after Palantir’s drop so far this year, which has been notable even in a rough year for software stocks.
Palantir shares were recently up 0.8% at $137.98. That put the company’s market cap at roughly $354.7 billion. The stock is trading at a price-to-earnings ratio close to 155, still a lofty figure despite the recent dip.
Software stocks are starting to come back after recent drops on worries that generative artificial intelligence could shake up old software models. Investor’s Business Daily says the iShares Expanded Tech-Software Sector ETF has lost about 11% in 2026. Palantir is still off 23%, even after posting first-quarter numbers ahead of Wall Street forecasts.
Palantir’s first-quarter numbers stay in focus after the company reported revenue jumped 85% from a year ago to $1.633 billion. U.S. revenue surged 104%. Palantir also lifted its revenue outlook for 2026 to a range of $7.650 billion to $7.662 billion. CEO Alex Karp pointed to the company’s “Rule of 40 score,” saying it soared to 145%—a software benchmark that combines revenue growth with adjusted operating margin. SEC
That’s the bullish view. A Seeking Alpha piece from Bay Area Ideas kept its strong-buy call on Palantir, citing 85% revenue growth, 60% adjusted operating margin, a 31% jump in customer count and net dollar retention at 150%, which tracks how much existing clients spend after renewals and churn.
Price is the other angle. A piece from 24/7 Wall St., seen on Yahoo Finance, said PayPal has a simpler risk-reward setup, pointing to PayPal’s projected $5.56 billion in free cash flow for 2025, much higher than Palantir’s $2.27 billion. Free cash flow is what’s left after costs and capital spending. PayPal shares were around $44.07 on Tuesday, with a P/E near 8.3.
More competition is moving in on Palantir. Anthropic, Blackstone and Hellman & Friedman said their AI-native enterprise services firm bought Fractional AI. The Fractional AI team will work on getting Claude models from Anthropic into companies’ main operations. Fractional AI CEO Chris Taylor and CTO Eddie Siegel said their goal is to close the “multi-trillion-dollar gap” between how businesses run now and where AI could take them. Blackstone
That puts Anthropic, OpenAI and Snowflake in the spotlight for Palantir investors. Now the question for Palantir isn’t just if it can sell AI software. Investors are watching to see if AI model builders and data platform competitors can bundle enough engineering and consulting to win the same business from enterprise and government buyers.
Palantir’s premium is now tied to how well it can keep customers and get them to spend more after starting with its Artificial Intelligence Platform, according to a GuruFocus note on TradingView. The note said that if growth inside current accounts stalls as early AI work wraps up, there could be more pressure on the shares.
But the risk isn’t one-sided. If Palantir keeps moving pilot projects to big contracts, bears will have to say why a company with this kind of revenue growth gets priced like regular software. If growth slows down, the high multiple doesn’t give investors much protection.
Debate on Palantir has shifted. The company’s momentum is not in question for most. Now, the key question is whether that momentum is already built into the shares.
