Can Palantir Stock Reach $400? Here’s What This Investor Expects

Palantir (NASDAQ:PLTR) is a bit of a polarizing name and has attracted bull and bear arguments that are both easy to understand.

On one side, the bulls will tell you the big data company is well-positioned to make the most of the AI opportunity, having consistently exhibited robust growth and gained traction both amongst government entities and in the commercial sector, setting the scene for further expansion in the years ahead.

However, the bears have their own compelling case. They argue that while Palantir’s growth is impressive, its exorbitant valuation makes it difficult to justify wading in at current levels.

For investor Robin Hannoun, there’s no doubt about which camp he’s aligned with.

“Palantir’s deepening government contracts and AI-driven defense solutions position it as a critical player amid rising geopolitical tensions and national security needs,” says Hannoun. “Despite a premium valuation, Palantir’s robust fundamentals – organic growth, debt-free balance sheet, and expanding margins – justify a long-term bullish outlook.”

Underscoring this optimism, Palantir continues to land major multi-year government contracts that “magnify revenue visibility” and strengthen its competitive edge. For example, the company secured a $480 million deal with the Department of Defense to deploy AI-powered battlefield systems, a deal later expanded to a $1.275 billion ceiling due to growing demand. Meanwhile, Trump’s early 2025 proposal for a large-scale U.S. missile defense system – modeled after Israel’s Iron Dome and powered by AI – carries a proposed $175 billion budget, with room to exceed $500 billion.

“Emphatically,” says Hanoun, “government contracts tend to be long in duration and provide sticky, margin-effective revenue streams.”

Beyond the defense sector, which remains a major focus amid intensifying global tensions, Palantir has also built a broad portfolio of government contracts across civilian sectors. The company’s work spans collaborations with the CDC and HHS on pandemic response and public health systems, partnerships with Fannie Mae on risk modeling and compliance, and support for space programs in conjunction with NASA and other civilian agencies.

“This versatility and diversification of income sources strengthens Palantir’s viability as a going concern capable of generating income consistently amid shifts in demand cycles,” the investor further noted.

Still, even Hannoun concedes that the stock trades at a steep premium, as reflected in its valuation multiples. Palantir’s Forward P/E stands at 238.10, and 574.43 on a trailing twelve-month basis – far above typical software industry norms.

“However,” says Hannoun, “such measures can be deceivingly misleading when applied to a company at Palantir’s stage of growth and unique market positioning.”

Therefore, Hannoun thinks that for long-term investors, it’s more useful to concentrate on Palantir’s strong fundamentals and sustained growth path rather than getting caught up in short-term valuation figures. In any case, Hannoun thinks this growth story has plenty of room to run still.

“Considering this company boasts a market cap of ‘only’ $317B, I can see the stock more than tripling in value to a trillion dollar valuation and a $400 share price, barring any splits or share issuances/buybacks,” the investor summed up.

Bottom line, Hannoun rates PLTR shares a Strong Buy. (To watch Hannoun’s track record, click here)

It’s worth noting, though, that Hannoun’s take stands in contrast to the broader Street consensus. Based on a mix of 9 Holds, 4 Sells, and 3 Buys, PLTR stock carries only a Hold (i.e., Neutral) consensus rating. Going by the $105.29 average price target, shares are expected to decline by 24% over the next year. (See PLTR stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.