You won't find many large-cap stocks that have been as hot in 2025 as Palantir Technologies (PLTR 0.36%), Robinhood Markets (HOOD 5.11%), and Spotify Technology (SPOT 1.10%). But which of these high-flying growth stocks is Wall Street most bullish about? The answer appears to be Spotify.
What do analysts think about the prospects of Palantir and Robinhood? And why do they like Spotify the most right now?
Image source: Getty Images.
Palantir: An AI powerhouse, but the price isn't right
Palantir Technologies CEO Alexander Karp said in his company's first-quarter earnings press release, "We are in the middle of a tectonic shift in the adoption of our software." If he was exaggerating, it wasn't by much.
The company's revenue jumped 39% year over year in Q2, with U.S. revenue soaring 55%. The artificial intelligence (AI)-software company's commercial sales rose more than its government sales, which have been Palantir's mainstay since its founding.
While Palantir is unquestionably an AI powerhouse, Wall Street isn't overly optimistic about the stock over the near term. The average 12-month price target for Palantir is nearly 28% below the current share price.
Of the 25 analysts surveyed by LSEG in June, only four rated the stock as a buy or strong buy. Six analysts rated Palantir as either underperform or sell. The other 15 analysts recommended holding the stock.
Palantir's underlying business isn't the problem. Instead, it's the stock's valuation. Shares trade at a sky-high forward price-to-earnings multiple of 250.
Sometimes, such a nosebleed valuation can be justified by its growth. However, Palantir's growth rate, while impressive, isn't enough to convince most analysts that the current share price is defensible. It doesn't help matters when the company itself projects a slightly slower growth rate for full-year 2025 than it delivered in Q1.
Robinhood: Cashing in on crypto, but analysts are conflicted
Robinhood continues to fire on all cylinders. The financial services platform's total net revenue increased by 50% year over year in Q1, and its profits skyrocketed 114%.
Much of Robinhood's success is due to its expanding support of cryptocurrency. Crypto-related revenue doubled year over year in Q1 and made up more than one-fourth of total revenue.
However, Wall Street seems to be conflicted about Robinhood right now. Sure, 15 of the 22 analysts surveyed by LSEG in June recommend the stock as a buy or strong buy, but that bullishness doesn't carry over to share-price projections. The consensus 12-month price target for Robinhood is almost 14% below the current share price.
What's the reason behind this disconnect? There are likely some concerns about valuation. Robinhood's shares trade at 52.6 times forward earnings.
I suspect analysts might also be leery of Robinhood's dependence on cryptocurrency trading volumes, which can be volatile. It isn't surprising that CEO Vlad Tenev downplayed crypto somewhat in Robinhood's Q1 earnings call, stating that the company is "diversifying the business outside of the crypto business, which will make us less reliant on crypto transaction volumes."
Spotify: Bringing music to investors' ears, but a familiar problem
That brings us to Spotify. The audio streaming leader's revenue rose 15% year over year in Q1. Even more impressively, free cash flow jumped 158% year over year to a record high for the first quarter.
Similar to Palantir and Robinhood, the consensus Wall Street 12-month price target for Spotify stock is lower than the current price. However, the implied downside of roughly 5.5% isn't as pessimistic as the price targets for the other two skyrocketing stocks on this list. Also, 25 of 39 analysts surveyed by LSEG in June rated Spotify as a buy or strong buy.
It's the same song, different verse as to why analysts might not think Spotify's share price will continue rising over the next year. Valuation, again, is the main problem. Spotify stock trades at over 65 times forward earnings.
Is Wall Street right about these growth stocks?
I don't always agree with Wall Street analysts, but I suspect they could be right about Palantir, Robinhood, and Spotify. All three stocks' valuations have grown frothy and could lead to declines over the next 12 months.
If I had to pick the one stock analysts are most likely to be wrong about, I'd go with Robinhood. The company could address some concerns with its strategy to diversify revenue to decrease the reliance on crypto. It's also possible that the crypto momentum remains strong.
