- Stock Surge: Palantir’s shares have exploded roughly 3× in 2025, trading around $180 as of Oct 20–21, making it one of the year’s top-performing stocks [1] [2]. This rally is far above the S&P 500 and tech peers, propelled by red-hot AI investor enthusiasm.
- Big AI & Defense Deals: The rally is underpinned by a string of blockbuster contracts. Notable wins include a $10 billion, 10-year U.S. Army IDIQ agreement, a £750–£1,500 million UK defense/AI partnership, a “game-changing” AI integration deal with Boeing Defense, plus new commercial AI tie-ups (e.g. a Snowflake AI-data partnership and OneMedNet healthcare deal) [3] [4]. These deals highlight Palantir’s deepening role in both government and enterprise AI.
- Record Financials: Palantir’s fundamentals are finally catching up. Q2 2025 revenue jumped 48% YoY to ~$1.03 billion (its first $1B+ quarter) with $327 million GAAP profit, prompting management to raise 2025 revenue guidance to roughly $4.14–4.15 billion [5] [6]. U.S. government sales surged (42% of revs), and free cash flow is strong. Q3 guidance (~$1.083 billion) suggests growth is expected to continue [7] [8].
- Extreme Valuation: At ~$180 per share, Palantir’s market cap nears $400 billion, with forward price/sales >100× and P/E >200×, among the highest in market history [9] [10]. By comparison, veteran AI chipmaker Nvidia trades in the 20s P/S. Critics warn these “unsustainable” multiples mean the stock is pricing in almost all future growth [11] [12].
- Analyst Split & Targets: Wall Street is deeply divided. Bulls (e.g. Wedbush’s Dan Ives) hail Palantir as an “AI arms dealer” and see the boom as just beginning; Wedbush even envisions a $1 trillion market cap in the next few years [13]. Piper Sandler recently raised its 12-month price target to $201 (Overweight) [14]. In contrast, skeptics (including short‑seller Citron) call the valuation “absurd”, pegging fair value near ~$65–$70 [15]. Overall the consensus rating remains “Hold,” with targets ranging widely (roughly $100–$215, median ~$150–160 [16] [17]).
- Bubble Concerns: Many market watchers now warn of an AI-fueled bubble. A Bank of America survey found AI stocks listed as the top global risk, and analysts note that tech valuations are at euphoric levels [18] [19]. Investing.co.uk analyst Christian Harris cautions that PLTR, trading at “over 200 times earnings,” could be among the first to fall if the AI buzz cools [20] [21].
With Q3 earnings (Nov. 3) looming, investors will watch whether Palantir can sustain this torrid pace or if profit-taking ensues. The company’s defense and AI momentum is real – Saxo’s Jacob Falkencrone notes Palantir is “becoming an indispensable partner for enterprises in the AI revolution” [22] – but the stock’s stratospheric run also leaves little margin for error. As one strategist put it, “the stock is trading at what is frankly an absolutely wild valuation”, so any slowdown or market rotation could trigger a sharp pullback [23].
Sources: Recent reports from TechStock² (TS2) and Reuters detail Palantir’s massive AI/defense contracts and financial beats [24] [25]. Analyst commentary comes from Reuters and Quartz interviews [26] [27]. All data is current as of late Oct. 2025.
References
1. ts2.tech, 2. ts2.tech, 3. ts2.tech, 4. ts2.tech, 5. ts2.tech, 6. www.reuters.com, 7. www.gurufocus.com, 8. www.reuters.com, 9. ts2.tech, 10. www.reuters.com, 11. ts2.tech, 12. www.reuters.com, 13. www.reuters.com, 14. ts2.tech, 15. ts2.tech, 16. ts2.tech, 17. ts2.tech, 18. ts2.tech, 19. qz.com, 20. qz.com, 21. www.reuters.com, 22. www.reuters.com, 23. qz.com, 24. ts2.tech, 25. www.reuters.com, 26. www.reuters.com, 27. qz.com
