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There are few companies that can match the stellar growth record of Palantir Technologies (NASDAQ:PLTR) over the past few years. Indeed, PLTR has delivered unbelievable returns for investors, and its share price has multiplied itself many times over – increasing by a phenomenal 1,600% since becoming a publicly traded company just five years ago.
The vast majority of these gains have come within the last year and a half, as the big data company has developed a winning AI formula that has attracted a growing coterie of satisfied clients.
Palantir’s recent Q2 2025 only added more fuel to the fire, as the company’s revenues soared north of $1 billion while its Rule of 40 score (revenue growth rate plus profit margin) was a metric obliterating – to paraphrase CEO Alex Karp – 94%.
The company shows no signs of slowing down, and its raised guidance for Q3 would represent the highest sequential increase in Palantir’s history. Clearly, it’s been a great ride for investors.
But, can it continue? Investor Johnny Rice isn’t so sure.
“There’s no question the company is executing well and creating real value, but by any objective measure, the stock is overpriced,” asserts the investor.
Rice points out that the company is currently trading at some 115x sales, calling this an “eye-popping figure.” In fact, based on OpenAI’s $500 billion valuation, PLTR is trading at levels that are close to seven times more expensive than the maker of ChatGPT.
Moreover, the company’s Price-to-Earnings multiple is just as “extreme,” coming in at a multiple of ~510x.
“That simply isn’t sustainable,” adds Rice.
Though he’s a fan of the company, the investor doesn’t think it’s great investment – despite its strong track record over the past few years.
“At today’s price, I can’t recommend the stock,” sums up Rice. “Eventually, it should come down to a more rational level, and I believe that will be far lower than where it trades now.” (To watch Johnny Rice’s track record, click here)
Wall Street is also a bit jittery when it comes to PLTR. With 13 Holds far outweighing 4 Buys and 2 Sells, PLTR carries a consensus Hold (i.e. Neutral) rating. Its 12-month average price target of $154.47 implies losses in the high single digits for 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.