Palantir Technologies (PLTR 2.41%) stock generated triple-digit returns in 2024 and 2025. The data analytics company is currently worth $415 billion, but Wedbush analyst Dan Ives says the stock can climb 140% in the next year or two, such that the company achieves a trillion-dollar market value.
That would put Palantir in rarefied air. Only 10 U.S. companies, including Nvidia and Tesla, are worth at least $1 trillion. Most Wall Street analysts are less bullish; the stock has a median target price of $200 per share, which implies 15% upside from the current share price of $174.
Unfortunately, history says owning Palantir is incredibly risky. Here are the important details.
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Palantir is a leader in artificial intelligence decisioning platforms
Palantir helps customers across the public and private sectors manage and make sense of complex data. Its analytics software products, Gotham and Foundry, integrate information into an ontology, a decision-making framework powered by machine learning (ML) models that become increasingly proficient as the system captures more data.
That ontology-based software architecture differentiates Palantir from other data analytics platforms. But the company is truly formidable because it has developed an adjacent artificial intelligence platform that lets developers build large language models into workflows and applications, such that users can engage data and automate business processes with natural language.
Dan Ives, senior equity research analyst at Wedbush Securities, selected Palantir as one of his top picks for 2026. He says, "It's the gold standard when it comes to AI use cases. From all of our work, 70% to 80% of every AI use case, Palantir is ultimately involved." But Ives is not the only analyst to praise the company.
Forrester Research ranks Palantir as a leader in AI/ML platforms and AI decisioning platforms. The analysts write, "Palantir has one of the strongest offerings in the AI/ML space with a vision and roadmap to create a platform that brings together humans and machines in a joint decision-making model." The International Data Corporation also ranks Palantir as a leader in decision intelligence software.
Importantly, Palantir's revenue growth has accelerated in nine straight quarters, and those accolades suggest the company is well positioned to maintain that momentum. Spending on AI platforms is projected to increase at 38% annually through 2033, according to Grand View Research.
NASDAQ: PLTR
Key Data Points
Palantir is one of the most expensive software stocks in history
Palantir is undoubtedly an excellent company, but famous value investor Warren Buffett once warned investors, "A too-high purchase price for the stock of an excellent company can undo the effects of a subsequent decade of favorable business developments."
Palantir currently has a price-to-sales (PS) ratio of 107, which makes it the most expensive stock in the S&P 500 several times over. AppLovin is second at 38 times sales. That means Palantir could lose about two-thirds of its value and still be the most expensive stock in the index. Alternatively, Palantir's revenue could grow at 40% annually for the next three years, and it would still trade at 39 times sales even if its share price remains unchanged.
More concerning, I reviewed the historical valuations of more than 100 software stocks, including every software stock in the S&P 500, and arrived at this conclusion: Only seven software stocks besides Palantir have achieved PS ratios above 100, and all seven fell at least 65% after hitting their peak valuation. The average peak-to-trough decline was 79%.
What does that mean? As things stand, Palantir hit its peak PS ratio of 137 times sales on Aug. 12, when the stock traded at $187 per share. The stock will eventually drop 79% to $39 per share if its performance matches the historical average. Of course, past results are no guarantee of future returns, but I think the risk-reward profile is heavily skewed toward risk.
However, Dan Ives sees the situation differently. He recently wrote, "With the company making strategic moves to remain at the forefront of AI, we believe that PLTR has a golden path to become a trillion-dollar market cap company and will grow into its valuation."
