Palantir Technologies (PLTR) has seen significant growth in its artificial intelligence (AI) software sales, with shares surging 340% in 2024 and already up 46% year-to-date. The company’s revenue accelerated by 36% year-over-year in Q4 and 14% over the previous quarter.
Key to Palantir’s success is its growing revenue from U.S. commercial clients, which increased by 64% compared to the same period last year. This growth is driven by companies achieving tangible savings through the use of Palantir’s AI-powered software. For instance, a collaboration with an automotive supplier has resulted in automation of manual checks previously performed by human engineers.
Industry analysts expect significant productivity gains from AI, which could add trillions of dollars’ worth of value to the economy. However, some experts caution that investors should exercise caution due to the stock’s frothy valuation. With a market cap of $252 billion and an expensive price-to-sales multiple of 45, Palantir’s shares are trading at a high level despite the company’s strong revenue growth.
Historically, similar stocks have outperformed short-term business fundamentals but not consistently over the long term. The current stock price is priced for perfection, increasing the risk of another sell-off. As such, investors should consider waiting for a dip before starting a position, rather than chasing the stock at its current highs.
Source: https://www.fool.com/investing/2025/02/10/is-palantir-technologies-stock-a-buy-now