The past few years have been the stuff of legend for investors in Palantir Technologies (NASDAQ:PLTR). The company’s share price has seemingly soared higher than the Great Eagles of Middle-earth – Palantir gets its name from the seeing-eye orbs from Tolkien’s Lord of the Rings – eclipsing gains of 3,000% over the past three years.
Claim 70% Off TipRanks This Holiday Season
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential
The big question on everyone’s mind is whether this trend can continue in 2026. The company is clearly clicking on every level, and even naysayers have a hard time finding fault with Palantir’s performance. The company just delivered its second-straight quarter of billion-dollar revenues, and its $1.18 billion in sales represented a year-over-year increase of 63%.
The big difference in opinion between the bulls and the bears revolves around PLTR’s valuation. Fans of the company readily acknowledge that PLTR is trading at elevated levels, though many counter that Palantir’s exceptional business justifies the premium share price.
While top investor Danil Sereda admits that he missed the company’s historic bull run, he thinks it’s simply too late to jump on board at current levels.
“This discrepancy between fundamentals and valuation has widened to the point that even if we add premium growth rates on top of what’s already expected, we won’t see PLTR fairly valued,” explains the 5-star investor, who is among the top 2% of stock pros covered by TipRanks. “Solid fundamentals are not enough.”
Sereda points out that Palantir’s incredible Rule of 40 score of 114% (the combined sum of its revenue growth and its operating margin) is indeed “hard to match.” That being said, he also notes that this metric is really meant to gauge the success of start-ups, not companies with market caps in the hundreds of billions.
In this case, size does matter, as the investor posits that it’s a “logical consequence” for fast-growing entities to see their rates of growth eventually start to slow. And that could be a problem for PLTR investors, according to Sereda.
“If the deterioration in growth rates comes as I expect, at some point in 2026, even the massive 25%+ premium that I put on Palantir’s forward multiple won’t justify the stock’s price,” adds Sereda.
That’s not to say that the investor is ready to bet against Palantir, and he is therefore staying away from any short positions. He’s just not ready to go long, either.
“I can’t and don’t want to time the market, so I’m just staying on the sidelines, forecasting a harder environment for PLTR in 2026,” concludes Sereda, who gives PLTR a Hold (i.e., Neutral) rating. (To watch Sereda’s track record, click here)
That’s the overall gist on Wall Street as well. With 11 Holds overshadowing 3 Buys and 2 Sells, PLTR carries a consensus Hold rating. Its 12-month average price target of $187.87 hints at minimal movement up ahead. (See PLTR stock forecast)
