There is wide agreement that Palantir Technologies (NASDAQ:PLTR) is going gangbusters. The company continues to deliver stellar performances, even passing the $1 billion marker in revenues last quarter – representing 48% year-over-year growth.
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“This is still only the beginning of something much larger and, we believe, even more significant,” asserted CEO Alex Karp in his Q2 2025 shareholder letter, and the company head has plenty of evidence to back up this unbridled enthusiasm.
In addition to Palantir’s robust government contracts, U.S. commercial growth almost doubled its revenues in Q2, growing by 93% year-over-year to reach $306 million.
The question is not whether Palantir is a great and growing business, but rather whether or not it is a good investment. Indeed, PLTR’s bloated valuation is the biggest reservation most have at the moment.
This includes investor A.J. Button, who thinks that the “mind-boggling” valuation means that those buying in today will need to exercise no shortage of patience.
“I’m not saying that PLTR investors buying today won’t someday get their investment back, but it will likely take considerable time,” explains the 5-star investor.
Button details that Palantir would need to deliver “extreme” growth to justify its current price. The investor calculates that the company would need to grow revenue at 20% CAGR for the next decade to be trading at 17x sales.
“We have a number of extraordinarily rosy forecasts for Palantir’s future growth—including one where it grows rapidly into eternity—and they still don’t produce fair value estimates equal to PLTR’s current stock price,” adds Button.
Moreover, the investor points out that PLTR isn’t doing great internationally, where it experienced a decline of 3% year-over-year during the last quarter. Perhaps PLTR’s services are “not indispensable” after all, suggests Button.
Summing it all up, Button believes that the time has come to tamp down on the excitement.
“The bottom line on Palantir is that it’s a very fast-growing business, whose fast growth is already priced into the stock,” concludes Button, who is rating PLTR a Hold (i.e. Neutral) (To watch Button’s track record, click here)
That’s where most of Wall Street is as well. With 13 Holds – and 4 Buys and 2 Sells – PLTR carries a consensus Hold rating. Its 12-month average price target of $154.47 implies minimal movement in the year ahead. (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.