U.S. Rep. Marjorie Taylor Greene, a Georgia Republican, recently disclosed some buys in red-hot artificial intelligence (AI) stock Palantir Technologies (PLTR 4.14%), according to data compiled by Capitol Trades, which follows the trading activity of politicians.
According to the disclosures, the purchases ranging from $1,000 to $5,000 occurred on April 7 and 8. Of note, this activity follows an initial purchase of Palantir stock in mid-February.
As of closing bell on May 29, the stock had climbed 62% this year, completely overshadowing the S&P 500 and Nasdaq Composite, each of which is breakeven on the year.
We don't know why Greene bought the stock, and following the stock moves of any person without thought makes no sense, but that doesn't mean investors should ignore Palantir. Far from it.
Palantir has been crushing it in 2025
Like many of its peers in the AI realm, Palantir stock has exhibited the characteristics of a roller coaster throughout 2025. In February, shares experienced a sharp downturn immediately following news of President Donald Trump's orders to reduce spending at the Pentagon.
As the chart above shows, this panic-induced selling was fleeting. Perhaps one reason is that despite budget cuts at the Department of Defense (DOD) as well as other government agencies tied to cuts from the efficiency initiative called the Department of Government Efficiency, Palantir has managed to continue winning business in the public sector.
For example, earlier this year, it won a notable contract with NATO. Although that organization is not a singular government agency, my outlook is that working more closely with the U.S. and its military partners could lead to expansion opportunities for Palantir as it relates to cross-border deals.
It also recently won a $795 million expansion opportunity with the Army for its Maven Smart System (MSS).
Another reason investors may be flocking to Palantir stock is because unlike many of its peers in the technology sector, the software darling is relatively immune from ongoing tariff concerns.
In fact, I think the introduction of new tariffs is actually an opportunity to jump-start its business in the commercial sector. Following President Trump's "Liberation Day" tariff announcement in early April, Palantir released a new module whereby it can analyze real-time data to help retailers assess how tariffs are affecting their operations.
Image Source: Getty Images.
Does Palantir's valuation make sense
The chart below benchmarks Palantir against a cohort of other leading AI software growth stocks as measured by the price-to-sales ratio (P/S).
PLTR PS Ratio data by YCharts
Palantir's P/S multiple of 102 is a clear outlier among its software peers. But even so, the disparity between Palantir and its competition doesn't tell investors a whole lot.
To get a better sense of whether the stock might be overvalued, consider this: During the dot-com bubble in the late 1990s, companies such as Cisco and Amazon experienced peak P/S multiples in the range of 30 to 40. Not only is Palantir's P/S multiple considerably higher than that bubble territory, but the trends above also indicate that its valuation is continuing to expand!
Is Palantir stock a buy right now?
I'll admit that Palantir's ability to outmaneuver multiple drawdowns across the broader markets this year is impressive. But just because a stock goes up for a period of time doesn't make it a good buy.
Given the context explored above, I think the stock is due for a pullback. While I remain bullish on the company's long-run prospects, I do think the valuation multiples need to normalize sooner rather than later.
I see Palantir stock as overbought, but would consider buying the dip at some point down the road.
