Palantir (NASDAQ:PLTR) stock is on an unstoppable run, surging to an all-time high after a remarkable rally over the past year. Shares have skyrocketed more than 370% in that period, including nearly 60% in 2024 alone – making it one of the market’s hottest performers.
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Palantir’s latest Q4 2024 earnings report only added to the momentum, giving investors more reasons to stay bullish. With revenue growth, widening margins, and an expanding client base, enthusiasm around Palantir remains as strong as ever.
The big question now is: How much fuel is left in this rally? And does Palantir’s soaring valuation truly reflect its fundamentals, or is it running on hype?
One top investor, known by the pseudonym PropNotes, firmly believes that the excitement has gotten out of hand.
“This isn’t about high growth, and it isn’t about AI-powered product lines, it’s about the fact that somehow, PLTR has managed to build such a strong investor narrative that we’ve now entered full ‘mania’ territory,” explains the 5-star investor who sits among the top 1% of TipRanks’ stock pros.
PropNotes has no issue with Palantir as a company, and in fact, was a long-time proponent of PLTR before its shares took off into the stratosphere. However, the investor cannot justify the exceptionally bullish fervor, with analysts projecting ~30% average revenue growth over the coming decade.
“While PLTR – as a business – clearly has an incredible setup on the back of its AIP product and associated growth, we can’t say the same for the stock,” the investor emphasizes.
As evidence of this overexuberance, PropNotes cites the historical examples of Tesla and Nvidia, which also experienced rabid runs over the past few years. The investor notes that even at the heights of each of their ‘hype cycles,’ neither of these trillion-dollar companies came close to approaching PLTR’s Sales multiple of 100x.
“We think the stock’s valuation, at 100x sales, is incredibly perilous and should come off considerably in the coming weeks and months,” asserts PropNotes. “Enough is enough – it’s time to short this AI market mania.”
And with that, PropNotes delivers a clear warning: Palantir’s gravity-defying run won’t last – reality is about to hit. The call? Strong Sell. (To watch PropNotes’ track record, click here)
Wall Street seems to share PropNotes’ concerns. With a consensus Hold (i.e., Neutral) rating (2 Buys, 10 Holds, 5 Sells), analysts acknowledge the stock is overheating, as PLTR’s $88.60 price target implies ~26% downside. (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.
