Data analytics specialist Palantir has been a top stock performer in the artificial intelligence (AI) era, and it's blown through nearly every Palantir stock price prediction in its history.
The company, established in the aftermath of 9/11, has skyrocketed since the launch of its Artificial Intelligence Platform (AIP) in 2023, which added an AI layer to its deep data analytics platform. Since then, the stock has jumped by more than 20 times, making it the best performer on the S&P 500.
NASDAQ: PLTR
Key Data Points
However, those gains have come largely due to multiple expansion, as Palantir's price-to-sales (P/S) ratio soared to 118 as of Dec. 9, 2025. That makes it the most expensive on a P/S basis ever for a company of its market cap.
Still, there's no question that Palantir has wowed investors with the growth of its business. It also appears to have little direct competition, saying it competes mostly with homegrown solutions from its customers.
So, where will the stock go from here? Let’s take a look at what Palantir stock could look like in a year and in five years, along with the key drivers for the business and what investors should know about investing in Palantir.
Palantir (PLTR) forecast
Palantir has reported accelerating growth and a widening operating margin almost every quarter since 2023. That is a credit to the utility of its AIP, which is rapidly being embraced by both the federal government and commercial businesses.
The company has also built up a formidable backlog, as remaining deal value in the U.S. commercial segment jumped 199% year over year in the third quarter to $3.63 billion, showing that businesses are flocking to the platform. The company also touted its Rule of 40 score of 114.
Palantir's software helps businesses connect the dots from disparate data sets, helping to make connections and get answers they otherwise wouldn't. Its AIP has made its software more useful and easier to use to find and get information. How Palantir performs in the future will depend on its ability to maintain that momentum and whether it can grow into its lofty valuation.
2026 forecast
Looking ahead to next year, Palantir seems well positioned for another year of strong results. The Trump administration and U.S. businesses have embraced its software. While it has struggled in Europe, its growth in the U.S., where revenue jumped 77% in the third quarter, has more than made up for it.
For the business, 2026 is likely to be another strong year, given the company's momentum and growing interest in AI software. However, the company's valuation is likely to put pressure on the stock.
In addition to a sky-high price-to-sales (P/S) ratio, Palantir has a price-to-earnings (P/E) ratio of roughly 300 after adjustments and a market cap above $400 billion, meaning it's already one of the most valuable companies on the market.
Wall Street expects Palantir's revenue to grow 41% next year to $6.2 billion and for its adjusted earnings per share to increase from $0.72 to $0.99. The current consensus price target is $172.28, calling for a 5% decline. That seems like a reasonable estimate, given that so much growth is already baked into the stock price. At this point, a pause in share price growth seems warranted.
2030 forecast
Looking out five years, it's more difficult to assess Palantir's potential. Its government business has surged under the Trump administration, and the next administration may not be as friendly to Palantir, which has become controversial for its secretive military technology and work with U.S. immigration agencies, which is why some investors see it as a defense stock.
The U.S. government segment still brings in more revenue than the U.S. commercial business, though the commercial segment is growing faster. Still, a future change in administrations could hurt Palantir.
Even so, the backlog in its commercial business should be encouraging for its long-term growth, as U.S. commercial total contract value closed in the third quarter of 2025 was up 342% to $1.31 billion. That represents a revenue stream that the company will cash in on over the next year.
Palantir's valuation is still a concern even over a longer time frame. If the company grew earnings per share by 50% annually over the next five years, an impressive accomplishment for any business, it would have $5.46 in earnings per share by 2030, which would give it a P/E ratio of 34. That assumes the stock doesn't grow, but that's still not a cheap valuation.
If Palantir executes, the stock should grow over the next five years. However, given its high valuation, 50% total growth seems like a fair estimate over the next five years.
Key drivers of Palantir's stock performance
Palantir's recent surge has been driven by the growth of its AI Platform and the need for businesses to accelerate traditional ways of doing business. Though the company's software can be secretive and not always easy to explain, it can also create huge efficiencies for businesses.
Using Palantir's software, Wendy's (WEN +3.22%), for example, was able to manage a supply chain issue in five minutes that previously would have taken 15 people a full day to fix. If Palantir can continue delivering those kinds of gains for its customers, the company should have a lot of growth ahead of it.
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Additionally, interest from the federal government has been a key driver for the company lately as the Trump administration tapped Palantir to compile data on Americans across agencies, and it's widely used inside the Department of Defense. That tailwind should remain as long as the Trump administration is in office.
Finally, Palantir also continues to invest in research and development (R&D), improving its own product and potentially developing new platforms.
Overall, the company is in a strong competitive position. It's seeing demand for its product continue to grow, it faces little direct competition, and it's been embraced by the federal government. If those factors remain in place, the business should continue to deliver blowout results, though the valuation will test the stock eventually.
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