Catenaa, Wednesday, June 04, 2025– Palantir Technologies’ rally shows no sign of letting up, with the stock gaining 71% so far in the year as investors remain captivated by its artificial intelligence promise.
Shares of the data-analysis software company closed at a record for a third consecutive day Tuesday, but were down by 3.4% on Wednesday, pushing their gain for the year to 71%.
While that’s good enough for second-best on the S&P 500 Index, it has Palantir trading at a staggering 205 times projected earnings over the next 12 months, a hefty premium to the broader market’s multiple of 22 times.
Palantir’s cult-like momentum rally, which follows a 340% gain in 2024 and a rise of 167% in 2023, stands in sharp contrast to a lukewarm reception from Wall Street analysts.
Data compiled by Bloomberg shows that the stock has only eight buy equivalent ratings and is dominated by 16 holds, with six sells, making it one of the lowest-rated S&P 500 stocks.
But bullish investors say the Street is overlooking a company poised to benefit from the current geopolitical and macroeconomic backdrop. Palantir works with the US military, which has doubled its use of the Maven AI system, and intelligence agencies.
It recently added NATO as a customer and is partnering with Fannie Mae to launch an AI-powered crime detection unit. It’s also building out its commercial and international clients, both large potential growth areas.
Palantir’s rebound from April has been underscored by a broader market pivot as investors navigate Trump’s on-again, off-again tariff rhetoric and search for companies offering relative safety, including those that can show solid future growth.
Palantir forecasts sales will rise to $3.9 billion for the calendar year 2025, a 36% increase from the previous year, and will continue to grow. This year’s free cash flow is forecast to top $1.5 billion, a more than 30% increase on the year.
Of course, stocks that have rapid rallies like Palantir can get hit hard on the downside — it shed more than 40% from a February peak through the early April nadir, mirroring some of the selling seen in other big technology shares. In addition to middle-of-the-road ratings, Wall Street analysts think the current rally has gotten ahead of itself.
