Palantir Stock Tumbles Amid Pentagon Budget Cuts and CEO Stock Sale Plan

Palantir Stock Investors Just Got Bad News From CEO Alex Karp and the U.S. Government | The Motley Fool

Palantir Technologies (PLTR -3.13%) was the best performing member of the S&P 500 (^GSPC -0.47%) last year. The stock advanced 340% in 2024 as the company delivered a series of strong financial results driven by demand for its artificial intelligence platform. However, after peaking around $125 per share earlier in February, the stock has since plunged 27% because shareholders received worrisome news from CEO Alex Karp and the Pentagon. Here are the important details. Palantir filed its Form 10-K on Feb. 18. The document showed CEO Alex Karp had replaced his previous trading plan with an updated version allowing for the sale of approximately 10 million shares through September 12, 2025. President Stephen Cohen also signed a trading plan allowing for the sale of 4 million shares through the same date. Those arrangements, known as 10b5-1 plans, protect executives from accusations of illegal insider trading. The written agreements can only be signed during specific periods when the insider has no consequential non-public information, and they execute automatically under predefined conditions. However, insiders selling stock under any circumstances still raises questions about whether they have lost confidence in the company, or whether they believe the stock is overvalued. And several Palantir executives unloaded a lot of stock last year, as detailed below: To be clear, readers should not assume the executives above have lost confidence in Palantir, nor should they assume the executives believe shares are overvalued. Insiders may sell stock for countless reasons and many are benign, such as portfolio diversification. Nevertheless, CEO Alex Karp could unload a significant amount of stock in 2025, which may put downward pressure on the share price. In February, The Washington Post and Bloomberg reported Defense Secretary Pete Hegseth asked Pentagon officials and other military leaders to propose ways in which the defense budget could be reduced by 8% annually over the next five years. Details concerning the cuts remain scant, but the reports raise questions about whether Palantir will be affected. Palantir has contracts with several Defense Department agencies, including the Air Force, Army, Navy, and Special Operations Command. In total, the company reported $1.2 billion in revenue from U.S. government customers in 2024, representing approximately 42% of total revenue. So, Palantir theoretically has a lot to lose from defense spending cuts. However, Dan Ives at Wedbush Securities sees the situation as a positive development for the company. He argues the focus on efficiency means Palantir will receive "more IT budget dollars at the Pentagon, not less." Nevertheless, investors are clearly nervous given that Palantir stock has fallen nearly 30% in a week. Palantir is undoubtedly near the top of many investors' watchlists. But Wall Street estimates the company's adjusted earnings will increase 35% in 2025. That consensus makes the current valuation of 220 times adjusted earnings look very expensive. Nevertheless, the median target price among analysts is $97 per share. That implies about 7% upside from its current share price of $90. Personally, I would be more interested in buying the stock if the share price fell another 10% to 20%. But investors eager to add Palantir to their portfolios can start with a very small position today, provided they have a time horizon of at least three years.

Palantir just took a $50 nillion it -- will it survive?

Palantir Technologies (PLTR) shares have declined after Defense Secretary Pete Hegseth mandated an 8% reduction in the Pentagon's budget, amounting to approximately $50 billion from its $850 billion budget. The White House plans to continue this annual budget cut for the next five years, increasing concerns for Palantir, as the government constituted nearly 42% of its total revenue in 2024, primarily from the Department of Defense (DoD) and military branches. CEO Alex Karp has initiated a new Rule 10b5-1 plan, enabling him and other insiders to sell shares under specific parameters to comply with insider trading regulations. Karp's previous plan allowed him to sell 37.6 million shares for nearly $1.5 billion. Under the new plan, he can sell about 10 million shares through mid-September, having already canceled his old plan despite still having the ability to sell approximately 11 million shares under it. The planned budget cuts target so-called "woke" programs focused on climate change and bureaucracy, redirecting funds toward border security, drones, and the Iron Dome missile defense system. This shift raises questions about the potential for growth in Palantir's business, as an 8% annual reduction could constrict funding availability for other projects. Despite the budgetary pressures, there is an argument that Palantir's artificial intelligence (AI) solutions may enhance efficiency and thus secure more funding in the long term. Historically, Palantir has experienced volatile government revenue growth, peaking at 47% in 2021, dipping to 14% in 2023, and rebounding to 30% in 2024, with significant momentum noted in Q4. On February 19, 2025, Palantir announced a strategic partnership with SAUR Group, a leader in water distribution and environmental services, to enhance contract management using Palantir Foundry's Generative AI capabilities. This multi-year deal aims to transform complex contract management, potentially opening new revenue streams. Given Palantir's focus on AI, this partnership could strengthen investor confidence in its commercial growth, especially in non-government sectors. Why Nvidia's earnings report could be the biggest market mover this week During a CNBC interview, CEO Alex Karp made supportive comments about Elon Musk, leading to speculation of potential collaborations (Karp's Pro-Musk Comments). This resulted in Palantir's stock reaching a new 52-week high of $125 during intraday trading, with a 4.6% increase that day, reflecting market optimism and retail investor enthusiasm. CEO's Stock Sale Plan: Later on February 19, 2025, a regulatory filing revealed Karp adopted a Rule 10b5-1 trading plan to sell nearly 10 million shares, potentially worth $1.23 billion, by September 12, 2025. This was seen as a significant insider sale, often interpreted as a lack of confidence, causing concern among investors. Notably, Karp canceled a previous larger plan, which might mitigate some negative perception, but the market reacted poorly, contributing to a plunge in after-hours trading. Pentagon Budget Cut Reports: Concurrently, on February 19, 2025, The Washington Post reported that Defense Secretary Pete Hegseth ordered plans for 8% annual budget cuts over five years, impacting the defense budget currently at $850 billion (Pentagon Budget Cuts Report). Given Palantir's reliance on government contracts (nearly 60% of revenue), this news posed a risk to future earnings, further pressuring the stock price. Palantir has also gained traction in the commercial sector, with revenue growth of 54% in 2024, including a notable 64% increase in the fourth quarter. The company's evolution from a data analytics vendor to an AI operating system has attracted numerous commercial customers, although many are still in the proof-of-concept phase for AI implementation. The valuation of Palantir remains a concern, with the stock currently trading at a forward price-to-sales (P/S) multiple of 62 based on 2025 analyst revenue predictions. This figure is significantly higher than the peak P/S ratio of around 20 times in the software-as-a-service (SaaS) sector during years of over 30% average revenue growth. While Palantir has forecasted revenue growth of 31% for 2025, sustaining growth from its primary government customer is critical to justifying the stock's current valuation. Disclaimer: The content of this article is for informational purposes only and should not be construed as investment advice. We do not endorse any specific investment strategies or make recommendations regarding the purchase or sale of any securities.

Palantir Sinks on Planned Pentagon Budget Cuts. Is It Time to Sell the Stock? | The Motley Fool

Palantir Technologies (PLTR -4.63%) shares have been red hot for the past couple of years, but the stock was tumbling after Defense Secretary Pete Hegseth ordered the Pentagon to slash its $850 billion budget by 8%, or about $50 billion. Even more alarming is that the White House is looking to reduce the budget of the Department of Defense (DoD) by 8% a year over the next five years. The government was Palantir's largest customer in 2024, representing nearly 42% of its total revenue, with most of that coming from the DoD and branches of the military. Palantir CEO Alex Karp has also adopted a new Rule 10b5-1 plan, which is used by executives and other insiders to sell their company's shares based on a set of parameters that they give to brokers. These plans are used to avoid any illegal insider selling and can be as simple as selling shares on set dates regardless of price, to using more complicated triggers. In the past, Karp's plans have been more complex, and he began to greatly increase his selling last September. Under his old plan, Karp sold 37.6 million shares, generating nearly $1.5 billion in proceeds. Under the new plan, he will be able to sell nearly 10 million shares through mid-September. He still had the ability to sell about 11 million shares under his old plan when he canceled it for the new plan, so it appears that he wanted to change the selling parameters. Under the directions of Hegseth, the Trump administration wants the DoD spending cuts directed toward "woke" programs such as fighting climate change, as well as excess bureaucracy, while directing funds toward projects such as securing the country's borders, drones, and the Iron Dome for America missile defense system. While there likely won't be any cuts to Palantir's programs, the question becomes how much room for growth will there be. An 8% annual DoD budget reduction combined with military money being directed toward border control and a big missile defense project appears to leave less room for other projects. The opposing argument, though, is that Palantir's artificial intelligence (AI) solutions can help create efficiency, and thus more money could be directed toward the company's software platform. In the past, Palantir has seen its government revenue growth be a bit unpredictable. In 2023, its government revenue growth hit a trough of 14% after seeing 19% growth in 2022 and 47% in 2021. It picked back up to 30% growth in 2024, including jumping 45% in the fourth quarter. The company was seeing strong momentum as the government was becoming more receptive to its new AI solutions. At the same time, the stock became a Wall Street darling due to the strides it was making in the U.S. commercial sector, which saw revenue climb 54% in 2024, including a 64% surge in the fourth quarter. Palantir has been gaining a lot of momentum in the commercial sector from its AI platform, which can be used to address mission-critical tasks across various industries. The running joke is that most Palantir investors don't actually know what the company does. Its roots are as a data gathering and analytics vendor for the government, finding non-obvious patterns. These solutions have been used to fight terrorism and track coronavirus cases. With AI, however, it has evolved to become an AI operating system, where it uses logic, functionality, and rigorous testing so that customers can use AI to accomplish tasks in real world environments. It has spurned building AI models, focusing instead on the application and workflow layers of AI. Palantir has been able to attract a lot of commercial customers to its platform. However, many of these newer customers are still in the proof-of-concept stage with AI, with the company having a big opportunity to them into production. The biggest negative against Palantir has largely been valuation. Even with the big drop in price, the stock still trades at a forward price-to-sales (P/S) multiple of 62 times 2025 analyst revenue estimates. To put that in context, at its peak a few years ago, the software-as-a-service (SaaS) sector was trading at around 20 times sales with over 30% average revenue growth. Palantir grew total revenue by 29% last year and has forecast 31% growth at the high end of its guidance for 2025. The company has a chance to grow into its valuation if it can continue to move customers from proof-of-concept into production. However, if growth once again dries up at its largest customer, the government, then it will be really difficult to justify the stock's current valuation. At this time, exactly how DoD budget cuts will affect Palantir Technologies is an unknown, but I don't want to be holding a stock trading at 62 times sales with it facing this type of potential risk. As such, I'd move to the sidelines.

Palantir Plummeted Today -- Is It Time to Buy the Artificial Intelligence (AI) Leader's Stock | The Motley Fool

Palantir (PLTR -10.08%) stock saw big sell-offs in Wednesday's trading. The software specialist's share price ended the daily session down 10.1% and had been off as much as 12.9% earlier in trading. Palantir stock saw a pullback early in today's trading following a disclosure yesterday that CEO Alex Karp plans to sell $1.2 billion in company stock. Sell-offs intensified late in the day's trading following a report from The Washington Post that suggested big defense spending cuts could be on the horizon. According to the report, Defense Secretary Pete Hegseth has instructed Pentagon officials to prepare for budget cuts that could come in as high as 8% annually over the next five years. With Karp laying the groundwork to move forward with a new stock-selling plan and the potential for Palantir to see weaker public-sector demand, investors got multiple bearish signals today. But even with the substantial valuation retreat, Palantir stock is still up roughly 360% over the last year. Even with today's double-digit share price pullback, Palantir is still valued at roughly 203 times this year's expected earnings and 68 times this year's expected sales. With such a highly growth-dependent valuation, the stock probably isn't a good portfolio addition for risk-averse investors or those without tolerance for high levels of volatility in the near term. And while Palantir's heavily forward-looking valuation opens the door for the stock to see big swings even on relatively little news, significant cuts for the U.S. defense budget could result in a material worsening for the company's operating backdrop. On the other hand, it's possible that an elevated focus on efficiency within Department of Defense (DOD) would actually create some positive demand catalysts for Palantir. For starters, there's a fair chance that the company's software will be used to identify the best areas to reduce spending. The company's artificial intelligence (AI) software tools could also be used to automate tasks at the Pentagon. Despite reports of possible DOD budget cuts, I think that Palantir's outlook in the defense industry remains very strong. While the company's growth-dependent valuation comes with a high level of risk, I expect that investors who buy shares at today's prices and hold over a five-year period will see very strong returns -- even if there's a lot of volatility in between.

Has Palantir Technologies Stock Peaked at $125? History Paints a Clear Picture of What's to Come. | The Motley Fool

For more than two years, Wall Street has been in a seemingly unstoppable bull market rally. Since the end of 2022, the ageless Dow Jones Industrial Average, widely followed S&P 500 (^GSPC -0.50%), and growth stock-powered Nasdaq Composite have respectively motored higher by 31%, 57%, and 87%, as of the closing bell on Feb. 21. While a confluence of factors has been the wind in Wall Street's sails, such as better-than-expected corporate earnings and Donald Trump's November victory, it's the evolution of artificial intelligence (AI) that's inspired this optimism more than anything else. With AI, software and systems are given the tools to reason, make split-second decisions, and evolve over time, all without the need for human intervention. This capacity to become more proficient over time at assigned tasks, as well as learn new skills, gives this game-changing technology a mouthwatering addressable market. AI stocks have soared in response to aggressive enterprise spending on AI solutions and the long-term potential of this technology. While Nvidia had been the hottest stock in the AI arena -- its graphics processing units (GPUs) are the clear top choice in high-compute data centers -- it's been supplanted by another industry-leading highflier: Palantir Technologies (PLTR -10.53%). Since 2023 began, Palantir's stock catapulted from around $6 per share to an intra-day high of $125.41 on Feb. 19. All told, this parabolic move higher added more than $260 billion in market value. The all-important question is: Has Palantir stock peaked at $125? History can be the guide that answers this query. But before making predictions about the future, it's important to understand how data-mining specialist Palantir became one of Wall Street's most-influential tech stocks. The primary catalyst above all others that's fueled this rally is Palantir's moat. This is a company with two core operating segments -- Gotham and Foundry -- that have no one-for-one replacement at scale. Gotham is the company's AI-powered software-as-a-service (SaaS) platform that assists federal governments with collecting and analyzing data, as well as planning and executing military missions. This security-focused platform typically secures multiyear contracts from the U.S. government and its immediate allies. Meanwhile, Foundry is Palantir's newer SaaS platform that leans on machine learning to help businesses make sense of their data. This is a subscription-based service that assists with data integration, workflow management, supply chains, and decision-making. Since it's a relatively new segment, rapid growth in commercial customer count should help sustain strong double-digit sales growth. Secondly, Palantir's otherworldly rally is a function of the company generating a recurring profit well ahead of the timeline Wall Street analysts had expected. Ongoing profitability validates the consistency of Palantir's operating cash flow, which is being powered by the transparency of multiyear government contracts with Gotham, and the predictability of subscription revenue from Foundry. The final piece of the puzzle for Palantir is its cash-rich balance sheet. It closed out 2024 with $5.23 billion in combined cash, cash equivalents, and marketable securities, with no debt. This cash buffer ensures that Palantir can successfully navigate an economic downturn, and allows the company to invest in ongoing innovation. But is all of this worth $125 per share and north of $282 billion in market value? A trio of historic markers paints a clear picture. Although history isn't guaranteed to repeat on Wall Street, it does have a tendency to rhyme. Best of all, history removes the emotion from investing and allows for data to be looked at objectively. The first potential historic monkey wrench for Palantir is that next-big-thing innovations have a checkered past. Over the last three decades, every hyped next-big-thing trend has, eventually (key word!), worked its way through a bubble-bursting event. When the internet began going mainstream in the mid-1990s, there was an abundance of hype regarding the ability of this technology to open new sales and marketing channels domestically and abroad. However, the dot-com bubble bursting in the early 2000s is a testament that it takes time for game-changing technologies to mature and for businesses to understand how to optimize them. Since the mid-1990s, the internet, genome decoding, nanotechnology, 3D printing, blockchain technology, and the metaverse have all followed this same script. If historic precedent holds true once again and the AI bubble bursts, emotion-driven investors will almost certainly weigh on Palantir's stock. Though Palantir's multiyear contracts for Gotham and transparent subscription revenue for Foundry should help to blunt some of the pain, companies valued at a premium tend to be hit hard when bubbles burst. Palantir's company-specific valuation is another source of trouble. While businesses that possess competitive advantages and/or moats are deserving of a valuation premium, there are limits to how far this premium can be stretched. Historically, market-leading business of next-big-thing trends have often peaked in a range of roughly 30 to 40 times trailing-12-month sales. This is around where Amazon, Cisco Systems, and Microsoft topped out prior to the dot-com bubble, and is on par with Nvidia's peak price-to-sales (P/S) ratio of 42 last summer. Comparatively, Palantir stock peaked at a P/S ratio of 99 last week, which is well over double the multiple typically observed from market-leading businesses hyped by a game-changing technology. Maintaining its P/S ratio of 83, as of the closing bell on Feb. 21, should prove virtually impossible. The third and final historic factor that comes into play is the broader market's valuation. In recent weeks, the S&P 500's Shiller price-to-earnings (P/E) Ratio, which is also referred to as the cyclically adjusted P/E Ratio (CAPE Ratio), has been hovering around 38. To put this figure into context, it's more than double the average Shiller P/E reading of 17.21, when back-tested 154 years. It also represents the third-highest reading during a continuous bull market in history. There have only been six instances since January 1871 where the S&P 500's Shiller P/E surpassed a reading of 30 for at least two months. The prior five occurrences were all eventually followed by declines in the S&P 500 or Dow Jones Industrial Average of 20% to 89%. Once again, companies with premium valuations tended to be hit the hardest when these stock market corrections occurred. Based solely on what history tells us, Palantir's stock has likely peaked at $125 and could face meaningful downside in the quarters to come.

Analyst revisits Palantir stock forecast following annual report filing

Palantir shares slipped lower in early Wednesday trading, but remain firmly in the green for the month of February, following an updated note from a top Wall Street analyst tied to group's newly-released annual report. Palantir (PLTR) shares have continued to outperform both their sector peers and the broader market benchmarks this year, rising more than 65% since the start of the year with gains powered in part by a stronger-than-expected fourth quarter earnings report. The data analytics group, founded by tech investors Peter Thiel and Joe Lonsdale and run by CEO Alex Karp, forecast 2025 revenues in the region of $3.75 billion, a 30% increase from 2024 levels, while pledging to boost its non-government sales past $1.8 billion. Palantir uses its artificial intelligence platform, known as AIP, to help clients pull together disparate collections of data into a single model that they then can build, train and deploy in their day-to-day processes. The group also benefits from its ontology offering, a framework that helps represent and connect real-world entities, data, and processes for its commercial clients. Palantir generated adjusted earnings of just under $1.16 billion last year, with a profit margin of around 40%, and expects a 2025 tally of around $1.56 billion. Jefferies analyst Brent Thill, however, picked through details of Palantir's annual 10-K filing with the Securities and Exchange Commission last night and reiterated his 'underperform' rating for the stock over the next twelve months. Palantir headcount growth in focus The analyst carries a $60 price target on the group, which he improved from $28 per share following its fourth quarter earnings report earlier this month. Thill noted a slowing headcount growth for the group last year, which rose by only 5% when compared to 2023 levels, and asked if management is "investing enough in the AI opportunity ahead". "We believe this could mean one of three things," said Thill. "Palantir's AI opportunity ahead is not as big as is priced in; its engineering/technical hires are being offset by reductions elsewhere (international headcount headcount decreased by 87 from 2023 to 2024 despite overall headcount increasing by 201) or the company over-hired 2 years ago." Related: Analysts overhaul Palantir stock price targets after earnings Thill also noted a flat level of non-U.S. revenue growth for the group, which is unashamedly pro-American in its shareholder communications, adding that while U.S. sales were up 38% last year, international revenues have grown only 14% over the past two years. Karp: we are 'very long on the U.S.' "We believe we are making America more lethal, making our adversaries increasingly afraid of acting against the interests of America and especially Americans," Karp told investors on a conference call earlier this month. "And we are proud of our moral stance, and we are very long on the the U.S. and what is happening and what will happen in the future." Positive takeaways from Palantir's 10-K, Thill said, were tied to the group's exposure to its top three clients, likely all within the U.S. Department of Defense, which accounted for 17% of overall revenues in 2024 compared to 18% in 2023. More AI Stocks: Thill said the "slight downtick" in exposure is a "step in the right direction in terms of reducing customer concentration risk." "The company continues to add new logos at an increasing rate, adding 214 net new customers in 2024 (vs. 130 added in 2023) and bringing the total customer count to 711," Thill said. Palantir shares were marked 1.2% lower in early Wednesday trading to indicate an opening bell price of $123.13 each. Related: Veteran fund manager issues dire S&P 500 warning for 2025

Palantir Is Sinking Today -- Is the Artificial Intelligence (AI) Stock a Smart Buy Right Now? | The Motley Fool

Palantir (PLTR) stock is getting hit with another day of substantial sell-offs in Thursday's trading. The company's share price was down 6.8% as of 2:20 p.m. ET amid the backdrop of a 0.7% pullback for the S&P 500 and the Nasdaq Composite indexes. Palantir's valuation is retreating today after Walmart issued sales guidance for this year that spooked Wall Street. On the heels of a 5.6% increase for its annual revenue last year, the retail giant only expects sales growth to be between 3% and 4% this year. Walmart is the largest retailer in the U.S., and investors often look to the company's quarterly reports, commentary, and guidance for indicators about the health of the overall economy. So while Palantir's business has limited immediate connections to Walmart, the retailer's results and performance outlook can have a significant impact on overall valuation trends across the stock market. The disappointing sales guidance also comes on the heels of other recent bearish catalysts for the artificial intelligence (AI) software leader. CEO Alex Karp recently disclosed plans to sell 1.2 million shares of company stock over the next six months, and the Department of Defense (DOD) has been ordered to move ahead with $50 billion in budget cuts for next year. With today's sell-off, Palantir stock is now off roughly 16% from its high. On the other hand, the company is still up roughly 328% over the last year alone -- and it's valued at approximately 189 times this year's expected earnings and 65 times expected sales. Even in the context of its strong sales and earnings growth, the company's valuation profile sets the stage for big pullbacks in conjunction with unfavorable macroeconomic shifts and business-specific developments. Even with today's pullback, the case could be made that Palantir stock is still priced for near-perfection in the near term. On the other hand, I think the stock still offers explosive upside potential for long-term investors at current prices. Palantir is posting fantastic margins and strong sales growth, and it occupies a leading position in its corner of the AI market. With long-term demand indicators in both the public and private sector looking promising, I believe the stock is a worthwhile buy-and-hold play. Today, Palantir has a market cap of roughly $245 billion, but I expect it will be able to hit a $1 trillion market cap by 2030.

Is Palantir Stock a Buy? | The Motley Fool

It's hard to overstate the success of Palantir Technologies (PLTR 4.58%). After struggling through its early history as a publicly traded company, the stock has surged since mid-2023, and it's the best-performing stock in the S&P 500 since the start of 2024, now up 584% in a little over a year as of Feb. 13 (Palantir was added to the index in September 2024). Palantir's deep data analytics software and its Artificial Intelligence Platform (AIP) have made it indispensable for the U.S. military and other government agencies, as well as big businesses. Its revenue growth has now accelerated over each of the last six quarters, and it has delivered a similar improvement in operating margin during that period. The stock soared on the fourth-quarter earnings report earlier this month as it easily beat estimates on the top and bottom lines. Overall revenue jumped 36% to $828 million, and adoption is surging in the U.S. with total revenue in its home country up 52% to $558 million. Both U.S. commercial and government sales were strong, with revenue up 64% and 45%, respectively. But in Europe, Palantir's growth has essentially stalled, and CEO Alex Karp criticized continental Europe for looking to the past for technology rather than adopting futuristic platforms like Palantir's. The software company has earned much of its recent gains, but does that make the stock a buy? Let's examine the value proposition for investors, and what Palantir's valuation means for the future of the stock. Palantir got its start shortly after 9/11, helping counterterrorism agencies sift through massive amounts of data to make connections they might have otherwise missed. The company calls this "data fusion," and the tech underpinning that kind of software is proving particularly valuable in the AI era as management has added a layer it calls ontology as part of its AI platform. The company spent much of the recent earnings call talking about ontology, and Chief Technology Officer Shyam Sankar said, "Ontology ends up being the intermediary representation that makes your enterprise accessible to AI in a way that's governed and secure and provides the observability that you need so that you can actually trust the AI." Palantir's deep roots in data fusion and its technology give it a significant head start over the competition. In fact, the company doesn't see itself as competing with other software companies. It says in its 10-K that it's competing with the "internal software development efforts of our potential customers," and they frequently try to build their own data platforms before turning to Palantir. On the earnings call, Sankar said, "Palantir's real competition is a lack of accountability in government -- these forever software projects that cost an insane amount that don't actually deliver results." Palantir's business growth has certainly been impressive, but most of the gains in the stock price have come from its expanding multiple. The stock now trades at a price-to-sales ratio of 100, which is extraordinary for any stock, especially one that's now one of the most valuable companies in the world. Based on adjusted earnings per share (EPS), the stock trades at a trailing price-to-earnings ratio (P/E) of 285. If we assume that Palantir can continue to grow revenue at 36%, its adjusted net-income margin holds steady, and its shares outstanding are steady, it would take six years for the company to grow its adjusted EPS to $2.60, which would make its PE a more reasonable 45, which assumes the stock price remains the same. Of course, no growth in the stock over six years would be a disincentive to owing it, but that helps show how much growth is already baked into the stock. Palantir could grow even faster than that and it could expand its adjusted net margin from 35%, but that will be difficult to maintain over several years. The company's recent run has been phenomenal, and its technology is impressive. However, given its valuation, investors are better off waiting for a pullback than buying the stock at the current price. Palantir could move higher, but that would likely only stretch the valuation further, raising the chances of a pullback even more. At this point, it's not certain the valuation is unsustainable, but it surely seems that way.

Palantir's valuation could plunge 50% by 2027: Here's why

Loop Capital has initiated coverage of Palantir Technologies with a buy rating and a price target of $141, indicating a potential upside of 25.8%. This comes as the company is recognized as a leader in the burgeoning artificial intelligence (AI) software market, despite the current high valuation of its stock. Analyst Mark Schappel acknowledged that Palantir, often regarded for its contracts with defense agencies, possesses the attributes of becoming a transformational software stock comparable to Adobe in digital marketing and Salesforce in cloud services. He described Palantir as being well-positioned to leverage themes related to AI and generative AI, suggesting significant market opportunities could lead to several multi-billion dollar revenue companies. Palantir's shares recently experienced a decline of about 10% following news that CEO Alex Karp has a new stock trading plan, which allows for the sale of nearly 10 million shares in the coming months, and due to reports that the Pentagon is preparing a list of potential cuts to the U.S. defense budget. Despite these setbacks, Schappel urged investors to view pullbacks as buying opportunities, emphasizing that it is difficult to quantify the opportunity presented by Palantir. Palantir at $116: If last year's run wasn't a fluke, is $200 next? Palantir's Ontology platform is described as a key asset, as it allows users to interact with data in their own terminology, facilitating AI-driven decision-making. Schappel indicated that there is substantial room for Palantir to grow in its enterprise AI business before reaching any ceiling. Palantir has seen its shares soar more than 48% already in 2025, positioning the software firm as a favorite among retail investors. However, the wider analyst community remains cautious, with 13 of 22 analysts rating Palantir as a hold and only four as a buy or strong buy. Palantir has made notable gains since the beginning of the AI revolution, with its shares rising approximately 550% since January 2023. By the end of 2025, the stock is reported to have gained 49% as of the most recent closing prices. Aswath Damodaran, a finance professor at New York University, recently expressed skepticism regarding Palantir's valuation during a podcast interview. He stated that he refrains from valuing Palantir because he does not have a clear understanding of the company's operations, possibly due to the proprietary nature of its work. Despite this, Palantir is forming partnerships with major AI players, including Amazon, Meta Platforms, Microsoft, and Oracle, enabling it to unlock growth in its previously stagnant federal sector business. In the latest quarter, Palantir's revenue surged 36% year-over-year to $828 million, significantly outpacing the management's forecast of $767 million. The company is projected to achieve 32% revenue growth for FY 2025, building on a previous growth estimate of 29% for 2024. However, the company relies heavily on government contracts, which constituted 55% of its revenue in 2024, presenting potential risks due to the unpredictability of such agreements. While government sales have driven Palantir's revenue, there is an increasing push towards expanding into the commercial sector, where the company's Foundry platform can serve a wide array of industries, including manufacturing and healthcare. U.S. commercial sales grew by 64% in the most recent quarter compared to a 45% increase in government sales. Palantir has improved its net margins to nearly 35% in 2024, up from 26% in 2023, by managing marketing expenses while maintaining customer loyalty. However, the firm faces challenges in scaling its large, complex contracts, particularly among small and medium-sized enterprises. Furthermore, growing competition from established tech companies might pressure its profitability. If revenue growth slows and margins decrease, Palantir's valuation could be significantly affected. Analysts predict that if net income growth declines to around 9% by 2027 due to reduced earnings growth, there could be a contraction in the price-to-earnings (P/E) ratio. This scenario could lead to a decline of about 50% in Palantir's stock price, dropping it to around $62 per share. Historically, Palantir's valuation multiples have shown volatility, as evidenced by its swift drop from $29 per share in September 2021 to under $9 per share by May 2022 due to shrinking revenue multiples.

Runaway bull? Warning to every Palantir investors: This figure could make or break your gains

Palantir Technologies has become one of the hottest stocks around, and its stock has skyrocketed by 333% in the last year. But like with all runaway stocks, there's one critical number that investors have to keep their eye on because it can decide whether your profits continue rolling or begin to fall apart, as per a report. The prime mover of Palantir's stellar growth has been its Artificial Intelligence Platform (AIP), which has allowed governments and businesses to leverage the power of AI for their operations, as per The Motley Fool. Palantir has recorded seven quarters of increasing revenue growth and 13 straight profitable quarters, leading it to join the S&P 500 and Nasdaq 100, reported The Motley Fool. Most investors are beginning to wonder if the company's stock price has run ahead of its real growth, particularly with possible threats such as the Trump administration's proposed defense spending reductions of 8% annually. Palantir's stock is currently trading at 183 times next year's projected earnings. According to The Motley Fool, Palantir's future growth is mostly dependent on one particular segment: its US commercial business, including AIP. The segment has quickly emerged as Palantir's most significant growth driver, and it will most likely decide whether the company will continue to surf the AI wave or experience a sharp slowdown, as per the report. In just less than two years, the segment has been impressive, with US commercial revenue surging 64% in the most recent quarter, reported The Motley Fool. Its "AI Bootcamp" workshops, which provide customers with hands-on experience with AIP for creating AI solutions, have been a huge success, drawing in new customers, according to the report. But the danger is that if growth in this segment begins to slow down, it could be disastrous for the stock, as per The Motley Fool. With Palantir's lofty valuation, even the slightest weakening could prompt a sell-off. What are the key risks for Palantir? A slowdown in its US commercial segment growth and external economic factors like defense spending cuts could be potential risks for Palantir. Why are investors worried about Palantir's valuation? Palantir's stock price is high relative to its earnings. Some investors fear that this could create a bubble.

Loop Capital Says "Hold Your Nose On Valuation And Just Get Involved" In Palantir, The Stock Tumbles On Rampant Dilution Fears And Pete Hegseth's Defense Spending Cuts

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. Ask any investor worth his salt, and he'll tell you that timing matters, quite a lot, in fact. Unfortunately, Loop Capital has chosen to go all-in on Palantir at a time when the high-flying darling of the AI world is taking a proverbial beating from all corners. For the benefit of those who might not be aware, Palantir is an AI-powered Software-as-a-Service (SaaS) provider that allows companies and government agencies to gather and analyze reams of data, allowing for the detection of hidden patterns within complex datasets. In what is its characteristic feature, the company's software-based offerings summarize and present the analyzed data in a manner that is quite easy to understand. Palantir filed its requisite Form 10-K with the SEC today, revealing among other things a change in the compensation plan of its CEO, Alex Karp, one that will allow him to sell up to 9.975 million shares (worth ~$1.23 billion) through the 12th of September 2025. Bear in mind that Karp's earlier plan had allowed for the sale of 48.9 million shares. Despite its reduced size, the current plan still entails significant dilution, and the stock has responded in-kind by taking a deep plunge today. Palantir shares took another downward leg in the afternoon when reports emerged that the US Defense Secretary, Pete Hegseth, has ordered Pentagon officials to develop a new budget that would cut defense spending by 8 percent annually. Prima facie, given Palantir's reliance on contracts from the US government, this spending retrenchment is a negative catalyst for the stock. And, the stock has predictably crashed, tumbling 10 percent in the regular trading session and another 3 percent in the after-hours trading. However, we would like to point out that Palantir might end up as a beneficiary of the oncoming fiscal retrenchment at the Pentagon, especially given the company's excessive focus on unlocking efficiency gains and optimizations. In fact, traditional defense contractors such as LMT, Northrop Grumman (NOC), and Boeing (BA) might have a lot more to lose. This brings us to the crux of the matter. Loop Capital analyst Rob Sanderson has initiated coverage on Palantir today with a 'Buy' rating and a price target of $141. While highlighting Palantir's "enormous market opportunities," Sanderson concedes that "at nearly 44x EV/2027E Revenue, we acknowledge that it's hard to say that this is the right spot to step up on PLTR." Sanderson then goes on to declare: "While we usually don't recommend paying 44x sales for software companies, we believe Palantir has all the hallmarks (i.e., massive market, category leader, strong execution) of becoming a game-changing software stock along the same lines as Adobe in digital marketing and salesforce.com in cloud." In what is the crème de la crème of Loop Capital's investment note on Palantir, Sanderson says: "So we believe the best strategy is to hold your nose on valuation and just get involved." As a parting shot, consider the following: Alex Karp's compensation plan was initially a lot bigger. So, from a dilution perspective, things could have been a lot more dire. Also, Palantir just might emerge as the big winner in the ongoing quest for financial discipline at the Pentagon, given its relentless use of the optimization buzzword. Finally, as we noted previously, Palantir is absolutely smashing performance metrics as envisioned under the so-called "Rule of 40," which posits that a company is healthy if its growth rate plus profit margin either equals or exceeds 40 percent. As of Q4'24, Palantir's "Rule of 40" score sat at an eye-watering 81 percent.

Is Palantir a Millionaire-Maker Stock? | The Motley Fool

With shares up 410% over the last 12 months, Palantir Technologies (PLTR -10.08%) has made its fair share of millionaires out of early investors. The data analytics company has become a Wall Street darling after incorporating generative AI into its business model. But is the optimism overblown? Let's dig deeper to find out if Palantir stock still has multibagger potential or if it is on the verge of a massive correction. As social media and low-cost trading platforms like Robinhood help popularize the stock market among retail investors, a company's "coolness" value is becoming too big to ignore. With over 31k followers on its Reddit page and 247,000 on X.com, Palantir Technologies seems to be developing a cult following. And it isn't hard to see why. The company is a spy buff's fantasy -- developing big-data analytics platforms that helped the U.S. track down Osama Bin Laden in 2011 and assisting the government of Ukraine with targeting in its war with Russia. Incorporating new, generative AI-based features brings its software deeper into sci-fi territory, allowing soldiers to get real-time updates about enemy formations in the middle of combat. Like Tesla's CEO Elon Musk, Palantir's co-founder and CEO Peter Thiel isn't afraid to court controversy. The billionaire executive openly backed Donald Trump's presidential campaign and is said to have introduced Trump to his current vice president, JD Vance. Palantir seems like part of the political "in crowd," and the market seems to like it. However, while Palantir is enjoying plenty of hype, its operational results are a mixed bag. Fourth-quarter revenue grew 52% year over year to $558 million as more clients incorporated its data analytics software. U.S. commercial revenue (up 64% to $214 million) is becoming one of the company's core growth drivers. However, despite the growth, this might prove to be Palantir's most vulnerable revenue stream. Unlike government contracts, where partially CIA-funded Palantir can lean on its trust and reputation to gain business, its economic moat seems much weaker among corporate clients. Businesses have many options for AI and big-data analytics, including giants like Microsoft and Snowflake, which offer similar services along with their cloud computing suites. Competition could limit Palantir's long-term growth potential and margins. Speaking of profits, Palantir isn't doing so great there either. While the company says adjusted net income jumped 80% to $341.9 million, this number adds back a jaw-dropping $281.8 million in stock-based compensation, which is equity paid to employees. Stock-based compensation is popular because it allows cash-strapped young companies to attract and motivate staff. However, this isn't free money because it comes at the expense of diluting shareholders' ownership claims on the company. In Palantir's case, the scale of the stock-based compensation looks uncomfortably high relative to earnings. The worst thing about Palantir is its valuation. With a forward price-to-earnings (P/E) ratio of 222, the company's share price doesn't price in any of its ongoing challenges with potential competition and profitability. The situation doesn't make much sense from a fundamental perspective. Financial markets aren't always logical. When a company develops a cult following, its valuation can reflect factors outside of strict business performance. That said, the risks of holding Palantir outweigh the potential rewards. And investors who want to make millions in the stock market are likely too late to benefit from this hype train.

Palantir Stock Is at An All-Time High. Here's What the "Dean of Valuation" Has to Say About It. | The Motley Fool

If you have been following the artificial intelligence (AI) revolution over the past two years, chances are you're familiar with a software company called Palantir Technologies (PLTR -10.08%). Since last January, shares of Palantir have risen some 550%. Just in 2025 alone, they have already gained 49% as of Wednesday's closing prices. While the stock price hovers around all-time highs, there's at least one prominent financial figure who hasn't quite bought into the bull narrative. I'm talking about Aswath Damodaran, a finance professor at New York University (NYU). Among financial media circles, Damodaran is referred to as the "Dean of Valuation." Below, I'll report what Damodaran recently said about Palantir. More importantly, I'll use his comments to help assess the full picture surrounding the company and whether the stock is a good buy right now. Last week, Damodaran sat down for a podcast interview with Scott Galloway, who is also a professor at NYU's Stern School of Business. During the segment, the Dean of Valuation was peppered with questions around Palantir -- in particular, whether or not he thinks the stock is overvalued. Damodaran didn't mince his words, saying that Palantir is the one company he refrains from valuing because he has "no idea what they actually do" -- or at least, not a sufficient idea, perhaps given the proprietary or classified nature of the company's work. A comment like that could be seen as humorous on some level. However, Damodaran's words are quite important. Below, I'll explore why his bluntness and honesty can serve as a valuable investment lesson. I'll admit right off the bat that Palantir has a lot going for it. The company's revenue and profits are soaring, and it's forming alliances with AI's most important players -- including Amazon, Meta Platforms, Microsoft, and Oracle. Moreover, the company has identified some pretty savvy ways to unlock accelerated growth in its historically lumpy federal sector business, primarily through partnerships with other defense contractors. The relationships listed above have jump-started Palantir's previously mundane growth and are helping to put the company at center-stage in AI enterprise software. Its AI software is used for data analysis across a host of purposes, including military operations, supply chain logistics, fighting financial fraud, energy, healthcare retail operations, and more. At least on some levels, you could say the same about other software platforms. A good way to assess Palantir's valuation could be to compare the stock to its peers. As the chart below illustrates, the company's price-to-sales (P/S) multiple of 96 is considerably higher than other leading enterprise software platforms. And the ratio is expanding, indicating that investors are buying up the stock on the heels of higher momentum. At the moment, Palantir is an exciting chapter in the broader AI story. But at least for some observers like Damodaran, it's not possible to accurately value this storyline -- and to what degree there may (or may not) be hype surrounding it. It can be tempting to see a rising share price and decide to follow the momentum in hopes that it goes even higher. But that doesn't necessarily make you a fundamental investor, per se. It's a bit more like the greater fool theory, which posits the notion of chasing a soaring valuation in hopes that someone else will buy your goods (or stock) at an even higher price point. This is why Damodaran's point is a valuable one. If you don't understand the granular details of a business, then investing in that company may be a shortsighted idea. Being a seasoned investor requires heavy levels of due diligence, and if a company's business model is beyond your scope or expertise, there's nothing wrong with looking for opportunity elsewhere.

Palantir Just Reached a Key Milestone. Is the Stock a Buy?

Palantir Technologies (PLTR -10.08%) has been one of the biggest stock market winners in recent times. The software company soared more than 340% last year for the best performance in the S&P 500 -- a benchmark that it had just recently joined. This stock has scored tremendous gains thanks to the earnings performance of the company. This tech player has carved out a valuable spot in the artificial intelligence (AI) space, and this has translated into high demand for its products and significant revenue growth across its two main customer groups. On top of this, Palantir just reached a key milestone that also could offer reason to be optimistic about the stock. Still, investors have worried about the stock's valuation, which has taken off and reached sky-high levels. Considering all of this, is Palantir a buy right now? Palantir's AIP Let's talk a bit about Palantir's path so far. The company, over its 20-year history, has built software platforms that help customers make better use of their data. In more recent times, Palantir has seized the power of large language models and created its Artificial Intelligence Platform (AIP). This software product integrates AI into the mix, aggregating customers' often disparate data and using this and other information to help them make key decisions, design new strategies, and more. In its early days, Palantir was most associated with government contracts, but these days, companies and organizations have noticed the potential of Palantir's software -- and are flocking to it for their projects. Meanwhile, government customers continue to line up at Palantir's door, too. All of this means that both government and commercial business is booming at Palantir, with each generating double-digit revenue growth quarter after quarter. In the most recent period, for example, U.S. commercial revenue soared 64%, and U.S. government revenue advanced 45%. Now, let's consider Palantir's recent milestone. The company has reported nine straight quarters of adjusted operating margin expansion, reaching 45% in the most recent quarter. That compares to adjusted operating margin of 34% in the year-earlier period. The company most recently reported quarterly results on Feb. 3. This steady increase in operating margin is important because it shows Palantir is strengthening its profitability. Turning revenue into profit Palantir isn't only growing revenue; it's been able to turn more and more of that revenue into a profit. Generating growth is great, but this combination of growth and profitability is what generally makes a company and its stock winners over the long term. So, clearly, reaching this milestone is important for Palantir and its investors and potential investors. Still, some may worry that after such enormous gains last year, and trading at mind-blowing 225 times forward earnings estimates, Palantir's upside may be limited. Investors looking for value stocks clearly will find better opportunities elsewhere. But I don't consider it particularly relevant to focus too much on this metric when evaluating a company like Palantir. While Palantir shares may not soar in a straight line forever, at today's level, they still make a reasonable buy for the investor who aims to hold for the long term. Though Palantir isn't a new kid on the block, it entered a fresh era of growth in recent times with the release of AIP in 2023 and the boom in commercial business. Only four years ago, Palantir had 14 U.S. commercial customers -- today it has more than 380. Demand for AIP and growth in the commercial business are in their early days and could generate more and more revenue gains for Palantir in the quarters ahead. And the trend in operating margin shows Palantir has what it takes to turn revenue gains into profit, a point I consider very important when choosing stocks to own for a number of years. So, the Palantir growth story is far from over, even if stock performance takes a pause at a certain point. All of this means Palantir makes an excellent AI buy for growth investors who plan on holding for the long haul as this exciting story develops.

Palantir's CEO Alexander Karp sells $44.6 million in stock By Investing.com

DENVER -- Alexander C. Karp, CEO of Palantir Technologies Inc . (NYSE:NASDAQ:PLTR), recently executed a series of stock transactions, according to an SEC filing. On February 20 and 21, Karp sold shares of Palantir's Class A Common Stock totaling approximately $44.6 million. The sales occurred at prices ranging from $96.43 to $108.28 per share. The transaction comes as Palantir, now valued at over $204 billion, has seen its stock surge nearly 295% over the past year, according to InvestingPro data. The transactions followed the conversion of Class B Common Stock to Class A Common Stock, as detailed in the filing. These sales were part of a pre-planned arrangement to cover tax obligations related to the vesting of restricted stock units. Despite these sales, Karp continues to hold a substantial number of shares in the company. The company maintains strong financial health with a current ratio of 5.96 and impressive gross profit margins of 80.25%. Palantir Technologies, known for its data analytics software, has been a focal point for investors, and the recent transactions by its CEO are likely to draw attention from the market. InvestingPro analysis indicates the stock is currently overvalued, with 20+ additional investment insights available for subscribers, including detailed valuation metrics and growth forecasts. In other recent news, Palantir Technologies Inc. has been in the spotlight due to several significant developments. The company is facing potential challenges as the US Defense Secretary plans to cut military spending by 8% over the next five years, which could impact Palantir's earnings given its substantial revenue from government contracts. Despite these concerns, analysts from Wedbush and Loop Capital maintain a positive outlook on Palantir's future, with Wedbush reiterating an Outperform rating and a $120 price target, and Loop Capital initiating coverage with a Buy rating and a $141 price target. Both firms highlight Palantir's strong position in the AI sector as a key factor in their assessments. Furthermore, Palantir has announced a strategic partnership with SAUR Group to enhance contract management using Palantir Foundry's Generative AI capabilities. This collaboration aims to improve the management of complex contracts in the water and environmental services sector, providing real-time insights to ensure compliance and operational efficiency. The partnership is expected to streamline SAUR's processes by converting large data volumes into structured insights. Analysts continue to view Palantir's AI offerings as a competitive advantage, with Wedbush likening the company's approach to playing chess in the AI arms race. Loop Capital also praises Palantir's AI data platform, suggesting it holds significant long-term investment potential. Despite the current market concerns, some analysts and industry observers remain optimistic about Palantir's ability to navigate these challenges and capitalize on AI-driven opportunities.

Why Palantir Bulls Say This Week's Selloff Is an Opportunity To Buy the Dip

Despite recent losses, Palantir shares have more than quadrupled in value over the past 12 months. As Palantir (PLTR) shares tumbled Thursday, extending losses on expectations of defense spending cuts, some analysts suggested the selloff could be an opportunity to buy the dip. Shares of Palantir were down 5% in intraday trading Thursday, a day after The Washington Post reported the Trump administration directed the Pentagon to trim the U.S. defense budget by 8% annually for the next five years. The U.S. government is a key client for Palantir, accounting for over 40% of its revenue in the fourth quarter, raising worries a pullback in defense spending would deal a major blow to the data analytics software provider. However, Wedbush analysts said "this is exactly the opposite" of how they believe cuts could affect Palantir, anticipating its flagship Artificial Intelligence Platform and potential to streamline operations could win Palantir more business from the Pentagon in a tighter spending environment. Earlier this month, analysts at Bank of America, Citi, UBS, and Morgan Stanley voiced similar sentiments, and boosted their price targets for the stock in the wake of Palantir's strong fourth-quarter results. The Wedbush analysts called Palantir one of their "top names to own in 2025," in a note to clients Thursday, adding they believe the company could become "the next Oracle or Salesforce" and reach a market cap in the trillions of dollars in the years to come. Their price target of $120 represents a nearly 13% premium to Thursday's intraday price. Loop Capital analysts were even more bullish on the stock, reportedly initiating coverage Wednesday with a $141 price target, calling it a "game-changing software stock." They also advised clients to view a pullback in the stock's price as a buying opportunity. This week's selloff dragged Palantir stock into correction territory, with shares down 14% from their record-high close Tuesday. Still, they've more than quadrupled in value over the past 12 months.

Palantir's chief technology officer sells $21.4 million in stock By Investing.com

Sankar Shyam, the Chief Technology Officer and Executive Vice President of Palantir Technologies Inc . (NYSE:NASDAQ:PLTR), recently executed a series of stock transactions involving the company's Class A Common Stock. The transactions come as Palantir, now valued at over $204 billion and maintaining an impressive 80% gross profit margin, continues to show strong growth with revenue increasing nearly 29% year-over-year. According to an SEC filing, Shyam sold shares worth approximately $21.4 million over several days. On February 20, Shyam sold shares valued at about $18.6 million, with sale prices ranging from $96.43 to $108.28 per share. The following days saw additional sales, including transactions on February 24 that amounted to approximately $2.77 million, with prices ranging from $90.27 to $98.10 per share. InvestingPro analysis indicates the stock is currently trading above its Fair Value, after delivering an exceptional return of nearly 295% over the past year. These sales were part of a prearranged trading plan, compliant with Rule 10b5-1, to cover tax obligations related to the vesting of restricted stock units. The transactions reflect Shyam's ongoing management of his equity holdings in the company. For deeper insights into Palantir's valuation and 20+ additional premium tips, check out the comprehensive Pro Research Report available on InvestingPro. In other recent news, Palantir Technologies Inc. has been impacted by potential Pentagon budget cuts, which could reduce projected military spending by 8% over the next five years. This development is significant as Palantir derives a substantial portion of its revenue from U.S. government contracts, particularly in the defense sector. Despite these concerns, Wedbush analysts have maintained a positive outlook on Palantir, reiterating an Outperform rating and a $120 price target, emphasizing the company's strong position in advancing AI technologies. Similarly, Loop Capital initiated coverage with a Buy rating and a $141 price target, highlighting Palantir's leverage to AI and GenAI themes. In a strategic move, Palantir announced a multi-year partnership with SAUR Group to enhance contract management using Palantir Foundry's Generative AI capabilities. This collaboration aims to provide real-time visibility into complex contracts, improving compliance and operational efficiency. Analysts have noted that Palantir's innovative AI offerings might still be in demand as the Pentagon seeks to streamline operations, potentially offsetting some risks associated with budget cuts. Palantir's ongoing efforts to expand its AI capabilities and market influence continue to draw attention from investors and analysts alike.

Palantir Technologies director Stephen Cohen sells shares worth $69.3 million By Investing.com

Stephen Cohen, President and Secretary of Palantir Technologies Inc . (NYSE:NASDAQ:PLTR), divested a significant number of shares in the company, according to a recent SEC filing. The transaction comes as Palantir, currently valued at $204.5 billion and maintaining impressive gross profit margins of 80.25%, continues to demonstrate strong market performance with a 19.9% gain year-to-date. On February 20 and 21, Cohen sold shares valued at approximately $69.3 million. The transactions involved selling shares at prices ranging from $96.43 to $108.28 per share. The sales were part of a series of automatic transactions designed to cover tax withholding obligations related to the vesting of restricted stock units. These transactions were conducted under Cohen's Rule 10b5-1 trading plan, which allows insiders to set up a predetermined plan to sell company stock. Cohen's sales included 301,847 shares sold on February 21 at a price of $102.14 per share, totaling $30.8 million. The previous day's transactions involved multiple sales at varying prices, contributing to a total of $38.4 million in sales. These transactions reflect the ongoing management of Cohen's holdings in Palantir Technologies, a company known for its sophisticated data analytics software. In other recent news, Palantir Technologies Inc. is facing investor concerns due to potential Pentagon budget cuts, which threaten a significant portion of its revenue derived from U.S. government contracts. The U.S. Defense Secretary's plan to reduce military spending by 8% over the next five years has triggered a notable decline in Palantir's stock, reflecting the company's vulnerability to federal budget changes. Despite these concerns, Wedbush analysts have maintained an Outperform rating and a $120 price target, highlighting Palantir's strong position in advancing AI technologies. Loop Capital also initiated coverage with a Buy rating and a $141 price target, praising Palantir's AI data platform and its potential in the growing AI market. Additionally, Palantir announced a strategic partnership with SAUR Group to enhance contract management using its Foundry Generative AI capabilities. This collaboration aims to improve the management of complex contracts in the water and environmental services sector by providing real-time visibility and actionable insights. Analysts from both Wedbush and Loop Capital have dismissed current market concerns, viewing them as distractions from Palantir's promising AI-driven trajectory. Investors will be closely monitoring how the proposed defense budget cuts unfold and their impact on Palantir's business with the military sector.

Palantir gets a buy rating from Loop Capital, which calls for more than 25% upside

Palantir is set to become one of the early leaders of a massive opportunity in the burgeoning artificial intelligence-driven software market, according to Loop Capital. The firm initiated coverage of the software company with a buy rating and $141 price target, which implies 25.8% potential upside after the pullback seen at the tail-end of Wednesday's trading session. Although the stock is still expensive, analyst Mark Schappel remains bullish on its longer-term outlook. "While we usually don't recommend paying 44x sales for software companies, we believe Palantir has all the hallmarks (i.e., massive market, category leader, strong execution) of becoming a game-changing software stock along the same lines as Adobe in digital marketing and salesforce.com in cloud," Schappel said in a Wednesday note to clients. "Palantir is leveraged to the AI (and GenAI) themes sweeping through the tech sector, which are enormous market opportunities likely to create several multi-billion dollar revenue companies," he added. Shares of Palantir slipped about 10% in the previous session on news that CEO Alex Karp has a new stock trading plan, which allows him to sell nearly 10 million shares of Palantir stock in the next six months, as well a report that the Pentagon has been directed to prepare a list of potential cuts to the U.S. defense budget . Shares continued to trade lower by more than 2% in premarket trading Thursday. That said, Schappel said investors should use pullbacks as buying opportunities. "It's hard to put a price on the opportunity, so we believe the best strategy is to hold your nose on valuation and just get involved," he said. PLTR 1Y mountain Palantir stock performance. The analyst mentioned Palantir's leadership in enterprise AI as a growth catalyst for the company, which is best known for its contracts with defense agencies to provide software and technology services. "There's room for Palantir to increase more than 5x in size before bumping up against any presumed ceiling," he said about the enterprise AI business opportunity. The company's Ontology platform, meanwhile, is its "secret sauce," according to the analyst. Oncology presents data to users in their own terms, rather than technical database terms, that allows for the successful deployment of AI-driven decision-making. With this product, Schappel said Palantir attracts customers and quickly converts them into playing customers. The investment "picture consists of being exposed to the largest and fastest growing TAM in enterprise software," he said. Palantir shares have soared more than 48% already in 2025, as the software company has become a favorite among retail investors. The analyst community is generally less sanguine on the stock, however. LSEG data shows that 13 of 22 analysts covering Palantir rate it a hold, while only four have a buy or strong buy rating.