Palantir Technologies (PLTR +2.53%) stock took a bit of a dive last week after Big Short investor Michael Burry made a comment about the company. Burry argued that Anthropic was "eating its lunch" on X before later deleting the post.
The actual threat posed by Anthropic to Palantir is a matter of debate. However, it serves as a reminder of this one issue if one wants to invest in this software-as-a-service (SaaS) stock.
Image source: The Motley Fool.
Palantir's vulnerability
The vulnerability that Palantir faces is valuation, namely its price-to-earnings (P/E) ratio of 202.
Indeed, the company's 56% yearly revenue growth in 2025 (and the 70% annual revenue increase in Q4) has helped the stock gain a premium. Also, the fact that it earned more than $1.6 billion in net income in 2025, far above the $462 million in 2024, confirms this rapid growth. Most of this has come from the eye-popping productivity gains created by its Artificial Intelligence Platform (AIP).
NASDAQ: PLTR
Key Data Points
Nonetheless, the aforementioned 202 P/E ratio is far above the S&P 500 average of 29. Additionally, the 97 forward P/E ratio and the forward one-year earnings multiple of 69 speak to how far the stock price has moved ahead of the company's growth.
Ultimately, time will tell if and how much Anthropic will actually crush Palantir. Still, competitive threats can come from unexpected places, and they are extremely difficult to predict. Thus, if one wants to buy Palantir stock at these levels, they need to approach the stock with an abundance of caution.
