PLTR Stock Soars 90% in Six Months: Is It a Smart Buy or Time to Hold Off
Palantir Technologies Inc. (PLTR) experienced a remarkable surge of 90% in its stock price over the past six months. This growth significantly outperformed the broader industry’s increase of 32% and the S&P 500’s advance of 23%. Investors are now contemplating whether to buy PLTR shares or hold off for a potential price correction.
Palantir’s Growth Driven by AIP
A key factor in Palantir’s stock performance is its Artificial Intelligence Platform (AIP). This platform has rapidly transformed into the company’s main growth driver. In Q2 2025, U.S. commercial revenues soared by 93% year over year. Additionally, total U.S. commercial contract value skyrocketed by 222% YoY, with remaining deal value reaching $2.79 billion, an increase of 145%. Customer growth also marked a notable 43% year-over-year increase.
Palantir’s AIP boot camps have played a crucial role in expediting client onboarding. These training sessions prepare enterprise clients to implement AI solutions quickly. This approach minimizes time-to-value, showcasing the platform’s user-friendliness and scalability. AIP empowers businesses to integrate autonomous AI agents, reducing decision-making timelines and significantly boosting productivity.
Palantir in a Competitive AI Landscape
Palantir operates in a competitive environment, with tech giants like Microsoft, Google, and Salesforce increasing their AI efforts. Microsoft is expanding Copilot features within Office and Azure, while Google is enhancing its Workspace and Vertex AI offerings. Salesforce is integrating AI into its CRM systems, striving for personalized user experiences.
Despite this competition, Palantir differentiates itself by focusing on critical sectors such as defense, intelligence, and healthcare—areas where security and performance are paramount. While other firms emphasize customer-facing tools, Palantir excels in delivering operational AI solutions that influence critical decision-making.
Strong Financial Position
As of June 30, 2025, Palantir has a strong financial standing, holding $6 billion in cash and boasting zero debt. This gives the company the flexibility to invest in growth without depending on external funds. In Q2 2025, revenue climbed 48% year over year, marking a significant milestone as the company surpassed $1 billion in quarterly revenue for the first time. The firm secured 157 contracts worth at least $1 million, including 42 contracts over $10 million, highlighting rising enterprise demand.
Expectations and Valuation Concerns
The Zacks Consensus Estimate for the third quarter of 2025 predicts earnings per share (EPS) of 17 cents, up 70% from the previous year. Earnings are expected to grow by 61% in 2025 and 31% in 2026. Similarly, revenue growth looks promising, with estimates of a 51% rise in Q3, and a 46% annual expansion in 2025.
However, Palantir faces significant valuation challenges. The stock trades at a forward price-to-earnings (P/E) ratio of 214, compared to the industry average of 37. This high multiple reflects elevated expectations for future AI monetization and government contracts, leaving little room for mistakes. Any unforeseen issues could lead to significant volatility.
Investment Outlook
Palantir has established itself as a viable player in enterprise AI, supported by strong fundamentals and increasing commercial traction. Nevertheless, its high valuation indicates that much of the optimism is already reflected in its stock price. Long-term holders should maintain their positions, while new investors may want to wait for a more advantageous entry point. A potential pullback could create a better buying opportunity.
Currently, Palantir holds a Zacks Rank of #3 (Hold), suggesting a cautious approach is advisable for prospective buyers.
