Palantir (NASDAQ:PLTR) stock, like any investment, requires weighing the potential rewards against the risks. While the company continues to perform exceptionally well, the primary – and arguably only – factor giving investors pause is its elevated share price.
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That concern hasn’t slowed the stock’s momentum. Palantir shares have surged by over 500% in the past 12 months, and late last week, the company reached yet another record high. Its valuation multiples now tower over sector medians by thousands of percentage points, raising questions about whether the fundamentals can keep pace with investor enthusiasm.
Next week’s Q2 earnings report, scheduled for August 4th, could provide a timely reality check. It offers a critical opportunity for the company to justify its lofty valuation – or fall short of the market’s high expectations.
Top investor Rick Orford, who’s ranked among the top 1% of stock pickers on TipRanks, is leaning toward the former scenario. He anticipates another upswing in PLTR shares following the earnings release, making it an easy call given the current trajectory.
“Should Palantir hit its Q2’25 targets – and with how the wind is blowing, that could happen – I think Palantir shareholders will be pleased.
His optimism is rooted in both historical performance and Palantir’s current momentum. Historically, the stock has swung an average of 17.5% following earnings – a double-edged sword, but one that Orford believes will cut favorably this time. Central to that belief is the company’s AI Platform (AIP), which helped drive a 39% year-over-year revenue increase last quarter.
That growth has been especially notable in Palantir’s U.S. commercial segment, where AIP adoption led to a 71% revenue spike in Q1. According to Orford, this surge reflects a broader trend: companies across the country are scrambling to implement AI but often lack the in-house expertise. Palantir’s AIP provides them with a ready-made solution.
“American enterprises are most likely desperate to implement AI solutions, but not all of them have the technical expertise to do so. With AIP, these enterprises get what they need to implement custom AI into their operations,” the investor explains.
Orford also sees Palantir’s government work as a key stabilizing force. Its deep ties to the U.S. defense sector – with multi-year, high-margin contracts – offer a steady revenue stream that cushions any slowdown in the private market.
“Palantir checks all the boxes of an exciting, growing company that’s at the intersection of two major trends: enterprise AI adoption and national defense modernization,” the investor sums up. “Analysts say Hold, but history says otherwise.”
Unsurprisingly, Orford gives PLTR shares a Strong Buy rating. (To watch Orford’s track record, click here)
The analyst consensus on PLTR is indeed a Hold, based on 10 Hold ratings, 4 Buys, and 3 Sells. The average 12-month price target stands at $109.50, implying a 31% downside from current levels. (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.