Palantir, the data analytics company, has seen a remarkable shift in its perception and performance. Once primarily viewed as a defense-oriented consultancy, the company is now showcasing its capabilities beyond that domain. Its advanced software platforms, designed for complex data environments, are gaining significant traction in the commercial sector.
The company’s recent financial results underscore this transformation. In the first quarter of 2025, Palantir reported revenues of $884 million, a 39% year-over-year increase. The U.S. commercial business, in particular, witnessed an impressive 71% annual growth, reaching a $1 billion run rate.
This growth was further bolstered by the company’s Advanced Integration Platform (AIP), which drove a 183% surge in U.S. commercial total contract value to $810 million. Encouraged by these strong results, Palantir has raised its financial guidance. The company now projects second-quarter revenues between $934 million and $938 million, and full-year revenues ranging from $3.890 billion to $3.902 billion.
These projections significantly exceed the market consensus estimate of $3.75 billion. Despite the robust earnings and optimistic outlook, some investors remain cautious about Palantir’s valuation.
Palantir’s financial successes and risks
Victor Dergunov, a top investor, acknowledges the company’s impressive financials and growth prospects but highlights the current high valuation as a potential risk. With a market capitalization of $277 billion against trailing twelve-month sales of $2.87 billion, Palantir’s valuation is nearly 100 times its TTM sales. Even with an optimistic view towards 2026, the forward price-to-earnings ratio could remain around 150, making it vulnerable to corrections.
Dergunov suggests that investors should wait for a price pullback before buying, with a strong buying opportunity in the $50 to $65 range. He has assigned Palantir shares a Hold (Neutral) rating, reflecting his cautious stance. This cautious approach is shared by other Wall Street analysts.
Out of 18 ratings, 11 analysts recommend holding the stock, with only 3 suggesting a buy and 4 advocating a sell. The average price target for Palantir stock is $98.56, indicating a potential downside of around 16% over the next year. As Palantir continues to innovate and expand its influence, its trajectory remains a topic of great interest and discussion.
The company’s controversial yet effective blend of technology and audacity has maintained its appeal to stakeholders and differentiated it from competitors. However, investors should carefully consider the company’s valuation and potential risks before making investment decisions.