Palantir (NASDAQ:PLTR) has continued on its world-beating journey this year, breaking revenue records, rapidly acquiring high-profile clients, and constantly raising expectations that there is plenty more up ahead. The company’s business is clearly thriving by every metric, and its share price has surged by 430% during the past twelve months.
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The biggest – and for many, only – knock on PLTR is its sky-rocketing valuation.
That concern has fueled a steady chorus of voices warning that much of Palantir’s future growth is already priced in – and a pullback may be inevitable. Indeed, the stock dipped 6% today, a reminder that even market darlings aren’t immune to volatility. Still, with PLTR hitting a new high earlier this week, the broader trajectory remains one of significant upward momentum.
That kind of sustained strength is starting to change minds. One previously bearish investor, known by the pseudonym Deep Value Investing, is finished fighting against all this momentum.
“I was dead wrong with Palantir,” admits the 5-star investor. “Stocks with sky-high valuation ratios are thriving.”
Deep Value explains that after a rough stretch earlier this year, overall sentiment across the market is rebounding to levels not seen since before geopolitical tensions took a toll on investor confidence. For a company like Palantir, whose growth story shows no signs of slowing down, this momentum should push its share price even higher.
“In my view, the narrative plays a more fundamental role, particularly when the broader markets (i.e. the S&P 500) are in a recovery phase,” adds Deep Value.
The investor further points out that Palantir is firing on all cylinders, with commercial sales of its AIP platform ramping up even faster than last year. In addition, fears of shrinking U.S. government contracts have not materialized, despite all the DOGE cuts and the announced trimming of the Pentagon’s budget.
So, for the time being, momentum is firmly on Palantir’s side. The investor, for a change, is now as well.
“To wrap up, I believe the stock is a buy despite sky-high valuation ratios,” concludes Deep Value. (To watch Deep Value Investing’s track record, click here)
Wall Street is a bit more restrained, however, as the “sky-high valuation” has simply gone too far for most. With 3 Buy, 11 Hold, and 4 Sell recommendations, PLTR has a consensus Hold (i.e. Neutral) rating. Its 12-month average price target of $100.13 implies an ~18% 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.