Is Palantir Stock a Buy Now? AI Growth, Financials, and Technical Analysis Explained

Palantir Technologies Inc. (PLTR) has emerged as one of the most explosive AI growth stories in recent years. The stock surged over 1,600% in recent years. This surge reflects soaring demand for its AI-powered enterprise software, as well as consistent momentum in commercial and government sectors. This article examines the company’s growth, financials, valuation risks, and technical analysis to identify investment opportunities for Palantir.

Palantir’s Explosive Growth Fueled by AI Adoption and Enterprise Demand

Palantir has shown strong growth in 2023 and 2024, followed by a parabolic surge in 2025. The monthly chart shows that the stock price has increased by over 1,600% from 2023 to a recent high of $155 in 2025.

This surge was driven by the accelerating demand for its AI-driven enterprise software across commercial and government sectors. The company capitalised on the global shift toward artificial intelligence and data analytics, positioning itself as a key infrastructure provider for modern enterprises. Strong US commercial growth, consistent contract wins, and rising adoption of its Foundry and Gotham platforms drove revenue higher and boosted investor confidence.

This explosive rally is likely to continue, supported by strong fundamental and technical developments. The chart below shows consistent bullish price action since 2021, with a clear breakout above a key black-dotted trendline, which triggered the recent surge.

Since that breakout, the stock has posted consecutive monthly gains, with the only exception being a slightly negative close in March 2025. This sequence of mostly positive monthly candles highlights strong price momentum and sustainability. The breakout pattern and the strength of the rally suggest the potential for further upside as long as the bullish structure remains intact.

Financial Performance of Palantir

Palantir delivered strong Q1 2025 results, driven by surging demand in the US market. The chart below shows that quarterly revenue in Q1 2025 was $ 883.86 million, while annual revenue was $2.866 billion.

The revenue surge in 2024 was higher than in previous years. Quarterly revenue was 39% higher than in Q1 2024. Moreover, the US commercial segment stood out with a 71% increase to $255 million. CEO Alex Karp credited a “tectonic shift” in software adoption, particularly in AI-powered enterprise solutions.

The profitability metrics also surge in 2024. Palantir reported a net income of $214.03 million, with a 24.22% profit margin, and an adjusted operating income of $391 million.

Moreover, the cash from operations was $310.26 million, with free cash flow hitting $370 million.

Momentum in US commercial bookings remained robust. Total contract value (TCV) hit a record $810 million, up 183% year-over-year. On the other hand, the remaining deal value (RDV) reached $2.32 billion, a 127% increase. These figures signal continued demand for Palantir’s enterprise software, especially in the private sector. The company’s positioning as a key provider of AI infrastructure appears to be gaining traction.

The company is expected to release the Q2 2025 earnings on August 4, 2025. The company expects 2025 revenue to be between $3.890 billion and $3.902 billion, and adjusted operating income to be between $1.711 billion and $1.723 billion. US commercial revenue is projected to grow at least 68% to exceed $1.178 billion. Q2 revenue is forecasted to be between $934 million and $938 million. Palantir also reaffirmed its outlook for GAAP profitability in every quarter, signalling continued confidence in its growth trajectory.

Can Palantir’s AI Growth Justify Its Premium Valuation

Palantir’s explosive growth and AI-driven momentum have captivated investors, but its current valuation raises significant concerns. Palantir’s P/S ratio is 121.28, an extraordinarily high figure even in the high-growth tech space. For context, most software companies trade at 10 to 20 times sales, while Palantir is priced well above those benchmarks, making the current valuation difficult to justify based on traditional metrics.

The valuation becomes even more stretched when considering earnings. Palantir’s P/E ratio stands at 659.96, a level that already reflects extremely optimistic assumptions about future profitability. This valuation implies that the market has already priced in many years of future growth. As a result, the stock is vulnerable to any misstep, whether from slower-than-expected revenue growth, margin compression, or rising competition.

However, if Palantir can maintain its momentum and solidify its position as a dominant force in the AI infrastructure space, the current premium may eventually prove justified. Therefore, investors may consider buying the stock on any meaningful dip.

How Palantir Compares to Other Top AI Stocks

ASML Holding NV (ASML) has a market capitalisation of $292 billion and dominates a critical niche in AI-related hardware, and is expected to experience meaningful growth through 2026. However, ASML trades at a significantly lower valuation than Palantir, despite owning a near monopoly in extreme ultraviolet (EUV) lithography machines, which are essential to semiconductor manufacturing.

Moreover, International Business Machines Corporation (IBM) and Salesforce (CRM) also appear undervalued relative to Palantir. IBM is transitioning into AI and quantum computing, with potential commercial traction expected around 2030; yet, its $266 billion market cap still lags behind Palantir’s.

Meanwhile, Salesforce remains the leader in CRM and is integrating AI into its platform. It trades at a valuation near the S&P 500‘s P/E ratio of 25.90, offering a more measured risk-reward profile. These companies may offer lower entry points for conservative investors, but they may not capture the same level of upside if Palantir’s vision materializes.

While Palantir remains richly valued, with a P/S ratio of 121.28 and a P/E of 659.96, its positioning in the AI infrastructure space is unique and deeply embedded across both commercial and government sectors. Unlike its peers, which are adapting to the AI wave, Palantir is already operating at its core. This premium reflects the market’s expectation for it to become a long-term leader in artificial intelligence deployment at scale. Therefore, the current valuations may be justified by future dominance in a rapidly expanding market.

Palantir Stock Volatility and Technical Chart Patterns

The weekly chart for Palantir shows that the price has been trading within an ascending broadening wedge pattern since the bottom in August 2024. This pattern indicates significant price volatility and suggests sustained upward momentum. The breakout above $120-$125 in May 2025 further amplified volatility and pushed the stock to new highs above the $150 area.

An inverted head and shoulders pattern formed between 2021 and 2024, with a key breakout above $40 in 2024. This breakout triggered a strong bullish surge, confirming a sustained uptrend. The pattern supports the outlook for continued gains as long as the structure remains intact.

Despite the bullish setup, investors should exercise caution and consider buying only on pullbacks. Entering near support levels within the wedge offers a more favourable risk-to-reward ratio amid ongoing volatility.

What Investors Should Do with Palantir Right Now

The short-term price action of Palantir shows the formation of a cup pattern with a neckline around the $125 area. A breakout above $125 has triggered strong bullish momentum, pushing the stock to new record highs. The price is currently trading within an ascending channel and has approached key resistance at $155. A breakout above $155 would signal further upside potential. However, a pullback toward the ascending channel support near $140 could present a buying opportunity for investors.

Final Thoughts

Palantir has delivered exceptional growth, driven by strong adoption of AI, robust financial performance, and a clear leadership position in the enterprise software market. The company posted record-breaking revenue and profitability in Q1 2025, and guidance for the rest of the year remains strong. Technically, the stock exhibits bullish patterns across multiple timeframes, with momentum bolstered by both fundamental and investor sentiment. The breakout above key levels, including $125 and $150, reflects market confidence in Palantir’s long-term AI strategy.

Despite its steep valuation, Palantir remains a high-conviction play for long-term investors. While short-term volatility and elevated multiples pose risks, the company’s deep integration in commercial and government sectors gives it an edge. Therefore, investors may consider buying the stock if the price pulls back to the $140 or $125 support areas, which offer a more favourable risk-reward entry amid ongoing volatility.