Palantir Stock Forecast 2025: Is PLTR Overvalued?

Palantir Technologies (PLTR) has seen its stock price soar this year on the back of strong quarterly results – but some analysts fear it’s headed for a fall.

Shares in the US-based company, which specializes in software platforms for big data analytics, rose 60% from $16.44 at the start of 2024 to $26.36 by early March 2024.

And even though the price had slipped back to $25.21 as the market closed on May 6, 2024, industry observers are divided on whether it’s overvalued.

In our Palantir stock forecast 2024-2025, we’ll look at the factors influencing the PLTR stock price and how the company, which hit the list of the best tech stocks to watch in 2024, has been affected by its chief executive’s views on Israel.

Table of Contents Table of Contents

1. Key Takeaways
2. Summary of the Latest Palantir Stock Predictions
3. Palantir Stock Analysis: Key Drivers to Consider
4. Focus on the Future
5. Palantir Stock Forecast 2024-2025: Analysts’ Views
6. Palantir Stock Predictions 2024-2025: Where Will the PLTR Price Go Next?
7. The Bottom Line: Should I Invest in Palantir?
8. FAQs
9. References

Show Full Guide

Table of Contents

1. Key Takeaways
2. Summary of the Latest Palantir Stock Predictions
3. Palantir Stock Analysis: Key Drivers to Consider
Show Full Guide
4. Focus on the Future
5. Palantir Stock Forecast 2024-2025: Analysts’ Views
6. Palantir Stock Predictions 2024-2025: Where Will the PLTR Price Go Next?
7. The Bottom Line: Should I Invest in Palantir?
8. FAQs
9. References

Summary of the Latest Palantir Stock Predictions

Palantir Stock Analysis: Key Drivers to Consider

Any PLTR stock forecast needs to give an overview of the business.

Palantir builds software that enables organizations to create and run artificial intelligence across both public and private networks.

The company, whose clients include the US government, is behind products such as Palantir Foundry, Palantir Gotham, and Palantir Apollo.

These are used in areas as diverse as anti-money laundering, defense, data protection, and cryptocurrency.

For example, last November, Palantir won an NHS England contract worth more than ￡300m ($381m) to develop a new patient platform.

Here, we take a look at the crucial factors that are likely to influence the future direction of the PLTR stock price.

Strong Quarterly Results

Let’s start with how the company is performing. In its first quarter 2024 results, Palantir revealed that revenue was up 21% year-over-year to $634 million.

It also noted GAAP net income of $106 million. This represented a 17% margin and the sixth consecutive quarter of GAAP profitability. The GAAP earnings per share was $0.04.

The results statement also showed that US commercial revenue was up 40% year-over-year to $150 million. The number of customers, meanwhile, rose 69% to 262.

Looking ahead, the company increased its full-year 2024 revenue guidance to between $2.67 billion and $2.68 billion.

US commercial revenue is expected to be in excess of $661 million, representing a growth rate of at least 45%. Adjusted free cash flow should be between $800 million and $1 billion.

Focus on the Future

In his most recent letter to shareholders, Palantir chief executive Alex Karp insisted the company had exceeded expectations.

“Our business is now growing at a scale and pace that even our most ardent advocates would have been hard-pressed to say was likely, or even possible,” he wrote.

He also claimed the company’s views on how software could be built and what it was capable of accomplishing had been “derided as fringe” in the past.

“We were routinely told by investors that building technical infrastructure for the enterprise market, let alone government agencies, was the surest and quickest way to run a business into the ground,” he explained.

Investing More Heavily

He also emphasized that the company had been investing even more heavily in letting potential partners use its software in order to decide what works for them.

“In the last quarter alone, we conducted more than 660 bootcamps with organizations across industries and sectors, providing potential partners with an opportunity to test and begin building on our platforms,” he wrote.

As far as the future is concerned, Karp insisted that Palantir’s intention was to make its AI platform “the most dominant infrastructure” in the market. He added:

“We are working to make AIP available to an even broader range of organizations in the markets that we serve, including businesses across the US and abroad, state and local government entities, as well as research scientists and academic institutions.”

Views on Israel

However, it hasn’t been all plain sailing for Karp. Earlier this year, he admitted in an interview that the company had lost employees over his public support for Israel.

“We’ve lost employees. I’m sure we’ll lose employees,” he said. “If you have a position that does not cost you ever to lose an employee, it’s not a position.”

In a letter to shareholders last November, Karp had reiterated his support for Israel in the ongoing conflict.

“We are one of a few companies in the world to stand up and announce our support for Israel, which remains steadfast,” he wrote. “Palantir stands with Israel.”

Stock Price Performance

Palantir’s stock price has increased sharply over the past year, largely due to its strong quarterly results announcements.

In early May 2023, the PLTR stock price stood at $9.5. However, by early March 2024, it had risen 179% to $26.46.

Even though the price has since cooled to around $22, this is still an uptick of 177% over the past year, which is obviously great news for investors.

Palantir Stock Forecast 2024-2025: Analysts’ Views

So, what are the Palantir stock predictions of analysts and industry observers?

Susannah Streeter, head of money and markets at Hargreaves Lansdown, believes the outspoken Karp’s views may cause more personnel problems.

She told Techopedia:

“It could throw up recruitment challenges given that the fight for talent in the AI industry, to keep powering new innovations, is still super-strong.”

More broadly, however, Streeter acknowledged that Palantir was successfully providing the platforms that enable AI tools to be used effectively.

“In the defense realm, this would include analyzing data on energy targets and developing military strategies to help officers plan campaigns,” she said. “In the corporate world it enables executives to analyze other businesses and come up with plans to compete more effectively and drive efficiencies.”

While Palantir faces competition from well-resourced rivals, such as Microsoft (MSFT) and Amazon (AMZN), its innovative sales techniques help potential customers work out how AI could work for them.

“Its immersive bootcamps enable clients to test out the platforms and work out use cases for the technology within their companies,” she said. “This strategy appears to be paying off handsomely so far, helping fire up lead generation and cash flow but it’s still going to have to pedal hard to keep those customers sticky amid fierce competition.”

Dan Ives, a managing director and senior equity research analyst at Wedbush Securities, reiterated his Palantir share price forecast of $35 on May 7.

Palantir delivered another robust performance led by US commercial growth of 40%. Boot camps are exploding; deal conversion is accelerating on the AIP vision. The key to the stock is AIP/US commercial and the Messi of AI is executing on the golden AI vision. $35 PT ????????

— Dan Ives (@DivesTech) May 7, 2024

According to Danni Hewson, head of financial analysis at AJ Bell, both positive and negative factors emerged from the first quarter results.

Hewson told Techopedia:

“Palantir’s CEO is on the money when he says his company was ‘on fire’ in the last quarter but the stellar revenue jump in the US couldn’t quite mask the issues it’s facing in Europe.”

The question for investors, she believes, is if the “cross breezes will cancel each out” or whether the incredible momentum this AI baby has been enjoying can continue.

“With its share price up a whopping 241% in a year, there will be plenty wondering if it’s gone too high too fast and whether the current valuation is way too hot,” she explained.

However, she acknowledged that a lot will depend on future technological developments.

“The AI boom is arguably still in its infancy and with businesses getting ever more connected, doubling down on its US strategy for now is a good call,” she said. “It’s what happens next that investors will be watching.”

Malik Ahmed Khan, an equity analyst at Morningstar, has slightly increased his fair value estimate from $15 to $16 per share, although this is still considerably less than its stock price.

“We forecast Palantir’s revenue growing at a 21% compound annual growth rate over the next five years as the firm expands both governmental and commercial operations,” he wrote.

Khan branded the recent results as “strong” and pointed out they were spearheaded by the ongoing momentum for the firm’s AI platform. However, he questioned its valuation.

“While we model robust top-line growth and margin expansion for Palantir, we remain unable to rationalize the market’s current valuation on the name,” he added.

Palantir Stock Predictions 2024-2025: Where Will the PLTR Price Go Next?

There is currently a rating of ‘Reduce’ on Palantir stock, as of May 7, 2024, according to the views of 13 Wall Street analysts compiled by MarketBeat.

Six of them have ‘Hold’ recommendations in place, while four see the stock as a ‘Sell’ and three view it as a ‘Buy.’

Source: MarketBeat, as of May 7, 2024

As of May 7, 2024, the stock price stood at $21.88.

However, the consensus view is that the stock price may fall around 12.28% to $19.19 over the coming year.

While the most optimistic analysts believe it could rise further to $35, the more pessimistic fear a devastating collapse to just $5.

But what about a Palantir stock forecast 2025? According to the algorithmic forecasts of Wallet Investor as of May 7, 2024, the stock could rise to $35.802 over the next 12 months.

Although a Palantir stock forecast 2030 is too far into the future, the site’s five-year forecast has PLTR stock price rising to a remarkable $80.152.

Note that analysts and algorithm-based predictions might prove to be wrong.

The Bottom Line: Should I Invest in Palantir?

No one can deny that Palantir has performed extremely well recently, and its stock price has been soaring in response. However, our PLTR stock forecast highlights that Wall Street analysts remain divided, despite the upbeat recent results announcements.

While the company’s potential is acknowledged, there are concerns that the price is now at a level that suggests Palantir has become overvalued.

Of course, it’s worth remembering that it’s operating in the increasingly popular world of AI, which is expected to heavily influence all of our lives. How successful Palantir can be in this area will be a deciding factor when it comes to the future movement of its stock price.

However, the final decision as to whether an investment in Palantir makes sense will be down to your own analysis and conclusions. Remember that you should never invest more than you can afford to lose.

FAQs

Rob Griffin

Financial Journalist

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Rob Griffin

Financial Journalist

Rob is a seasoned journalist with over three decades of experience spanning across business and finance journalism. Before embarking on a freelance career in 2002, he contributed his expertise to the business desks of notable publications such as The Guardian, Yorkshire Post, Sunday Business (now Business Post), and Sunday Express. Throughout his freelance journey, Rob has been a regular contributor to a wide range of national newspapers, consumer magazines, trade publications, and websites. His work has appeared in titles such as The Independent, Citywire, Daily Express, FT Adviser, and Sunday Telegraph, covering an array of subjects from market trends to…

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