Last year, shares of data mining specialist Palantir Technologies (PLTR -1.78%) skyrocketed by 340%, making it the top performer in the S&P 500 (SNPINDEX: ^GSPC) index. The momentum continued into 2025 as Palantir shares got off to a sizzling start to begin the year.
However, throughout March and April, the artificial intelligence (AI) darling witnessed some weakness as shares began to pull back on news that the Department of Defense -- a key Palantir partner -- was facing pressure by the new administration to identify areas to reduce costs.
Not long after, data published by Capitol Trades showed that U.S. Rep. Marjorie Taylor Greene loaded up on Palantir stock. Since Greene's trades were reported between April 7 and 8, shares of Palantir have soared by 130% as of this writing (Aug. 8). In hindsight, buying the dip in Palantir stock earlier this year looks like an incredibly savvy move.
While some investors may think they've missed the boat, fear not! Wedbush Securities technology research analyst Dan Ives recently raised his price target on Palantir to $200 following the company's astonishing blowout second-quarter earnings report.
Let's dig into the catalysts fueling Palantir's business right now and explore whether Ives' new price forecast is feasible.
Palantir is dominating the AI software agenda
At its core, Palantir develops a host of AI-powered software suites -- Foundry, Gotham, and Apollo -- each designed to solve complex data-driven challenges. These platforms are stitched together to form a broader fabric, integrating services across data analytics, real-time simulated modeling, and decision-making tools. Together, they form an AI backbone for both large corporate enterprises and government agencies around the world.
Image source: Palantir Investor Relations.
During the second quarter, Palantir generated growth of 47% and 49% across its commercial and public sector businesses, respectively. To understand just how impressive this is, consider that Palantir's Rule of 40 score now sits at 94% -- materially higher than any of its software-as-a-service (SaaS) peers and trails only Nvidia when benchmarked against the 25 largest companies by market cap.
Image source: Getty Images.
Can Palantir stock reach $200?
As of this writing, Palantir stock trades for $180 per share -- implying only an 11% move to reach Ives' $200 target. Ives has been celebrating Palantir's "hyper growth demand," citing the "use case era of the AI Revolution" as Palantir's key differentiator -- suggesting that Palantir is uniquely positioned relative to its software peers.
The steepening curves in both revenue and profitability imply a strong unit economics across Palantir's operation. Much of this momentum can be attributed to notable upsells with existing customers, as well as the company's leading position for emerging use cases at the intersection of defense and technology -- just as Ives implies.
PLTR Revenue (TTM) data by YCharts
Is Palantir stock a buy right now?
The chart below benchmarks Palantir against a peer set of leading enterprise software stocks on a price-to-sales (P/S) basis. With a P/S ratio of 132, Palantir is the clear outlier in this cohort.
PLTR PS Ratio data by YCharts
To me, Palantir's continued valuation expansion suggests that growth investors are looking beyond traditional metrics and increasingly buying into a greater narrative -- one that positions Palantir in a league of its own as a company on the cusp of prolonged periods of accelerating revenue, profitability, and outright domination in the AI software realm.
As a longtime Palantir bull, I'm both excited and optimistic about the company's future. While I do think Ives' forecast of $200 per share is achievable, it's also worth pointing out that Palantir stock now trades at a historically high valuation -- similar to levels seen during prior stock market bubbles.
For these reasons, buying Palantir stock today comes down to individual risk tolerances. If you are an investor with a long-term time horizon, the payoff from Palantir could be enormous as the AI narrative continues to unfold. But like most growth stocks, owning Palantir will not come without periods of extreme volatility.
