Palantir Technologies (PLTR) continues to trade near its all-time highs, still riding an incredible wave of bullish momentum that appears unstoppable, thanks to its position as one of the largest—if not the largest—beneficiaries of the AI boom. On one hand, triple-digit valuation metrics compared to analyst growth expectations that don’t quite match the price might suggest an overpriced or overhyped stock.
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However, Palantir’s strong results, repeated upward guidance revisions, and a lower perception of macroeconomic risk in recent months have kept the bullish case very much alive. Estimates continue to rise, and the company continues to deliver, which only fuels the trend.
Each new high shows that the AI opportunity for Palantir doesn’t fit neatly into traditional valuation metrics. As long as this bullish trend shows no sign of cooling off, my Buy rating stands. That said, because Palantir is so momentum-driven, I believe its technicals need to be watched closely. Currently, staying away from Palantir due to fear of short-term corrections could prove to be a costly mistake in hindsight.
Palantir Momentum Versus Its Steep Valuation
Palantir continues to post new highs, driven by relentless demand for its uniquely positioned AI software, primarily on the commercial side, but also with strong demand from government contracts.
The fact that it trades at about 230x forward earnings—roughly 9.5x the industry average—hasn’t done much to dampen the optimism. If anything, it’s fueled it. Analysts have sharply raised their EPS and revenue growth projections in the last six months. Estimates for fiscal 2025 EPS are up as much as 22% and revenue projections are up by 12%.
Since June, the momentum has only strengthened as longer-term forecasts out to 2030 and beyond have also been revised higher, by more than 10% for EPS and 12% for revenue.
It’s not hard to see why the market keeps bidding it up. Palantir’s management hasn’t just beaten expectations; they have consistently raised guidance, signaling not only that growth is still in its early stages but also that the company’s upside potential could be bigger than current models can fully capture, especially with AI’s impact still unfolding.
Still, even with these constant upward revisions, Palantir’s valuation looks extreme by traditional standards. For example, the current long-term EPS CAGR estimate of 31% implies a PEG ratio of 7.4, indicating that the stock trades at more than seven times what its earnings growth would typically justify. By any standard measure, that suggests it’s likely overpriced.
Technical Insights on Palantir’s Healthy Trend
Fundamentally, investing in Palantir stock is becoming increasingly difficult to justify at such stretched multiples based solely on analysts’ projections. However, holding Palantir can still make sense, as long as the position is actively managed and there’s a clear plan to lock in profits or re-enter when conditions look favorable.
With that in mind, let’s dive into the technicals via TipRanks’ technical analysis tool. The chart below highlights some key points: Palantir’s share price trend over the past twelve months, its moving averages, and the on-balance volume (OBV).
Currently, the share price is in a clear uptrend, characterized by healthy higher highs and higher lows. Recently, it bounced sharply again, closing at $132 per share. Examining the moving averages, both the short-term 20-day MA and the mid-term 50-day MA are positioned above the 200-day MA, confirming the bullish setup.
TipRanks data indicates that the 20-day MA has also crossed above the 50-day MA, forming a bullish crossover. Additionally, the 200-day MA is also sloping upward, indicating that the longer-term trend is supportive.
Another technical indicator worth highlighting is On-Balance Volume (OBV), which helps gauge whether price movements are supported by meaningful trading activity. OBV is especially valuable in identifying whether institutional investors are participating in a rally, as volume often precedes price in momentum-driven moves.
In the case of Palantir (PLTR), OBV has been steadily rising in tandem with the stock price over the past twelve months, with no signs of a sharp divergence. This suggests that no underlying distribution is taking place—i.e., large investors are not quietly exiting their positions—supporting the view that the uptrend remains intact.
Given this backdrop, I see a compelling case for a long position in PLTR. That said, it’s essential to monitor for early warning signs, such as price stalling while OBV flattens or declines, which could indicate a weakening trend and potential shift in momentum.
The Case for Buying High on a Momentum Stock Like Palantir
Since Palantir positions itself as a high-momentum, hype-driven stock, I don’t think the usual “sell high, buy low” rule always applies, unlike blue-chip stocks, where dips often mean buying opportunities backed by strong fundamentals. For Palantir, buying near the highs can actually be the safest and most profitable strategy.
In a correction, buying too early in a dip risks catching a “falling knife,” where the stock continues to fall and leaves investors with losses or dead money until the trend finally reverses.
That’s why, for momentum stocks like Palantir, using technical tools to define momentum is just as important. Instead of trying to guess the bottom, a more innovative approach is to wait for confirmed breakouts supported by strong volume and momentum indicators—like the On-Balance-Volume (OBV) and moving averages I mentioned earlier—and ride the upward trends rather than hoping for rebounds from oversold levels.
Is PLTR a Strong Buy?
Over the last three months, expert consensus on PLTR has remained mixed. Out of 16 analysts covering the stock, three are bullish, four bearish, and the other nine are neutral. The average price target stands at $105.29, implying a potential downside of about 21.6% from the current share price.
Momentum Rules Over Math in Palantir’s Rise
Palantir’s momentum remains very strong and shows no signs of slowing down, which means the buying pressure outweighs concerns about its valuation. Analysts continue to raise their long-term estimates, helping to maintain the uptrend. Since PLTR is behaving like a momentum stock, it makes the most sense to follow the bullish trend. In other words, to ride the strength rather than timing the dips.
For that reason, I believe staying bullish makes the most sense, and focusing too much on valuation could mean missing key opportunities while momentum remains strong.