Palantir Technologies, a data mining specialist, has benefited significantly from the artificial intelligence (AI) revolution over the past three years, with its shares gaining over 1,300% and rising by 97% this year alone. However, as investors consider continuing to ride Palantir’s momentum, it’s essential to assess whether its share price trajectory is sustainable.
The company’s AI Platform, launched in April 2023, has been a catalyst for its growth, with revenue accelerating considerably since its launch and the company now boasting 769 total customers. This represents a more than twofold increase in commercial customers over the last two years.
While some analysts view Palantir’s growth as a positive sign, others are cautious due to concerns about valuation. The company’s shares have become increasingly expensive, trading beyond levels seen during peak days of the dot-com or COVID-19 bubbles.
Insiders’ views on Palantir offer insight into market sentiment. Billionaire investors Ken Griffin and Israel Englander recently added to their funds’ respective positions, while Stanley Druckenmiller sold out of his fund’s Palantir position. However, these dynamics may not be as straightforward, with some investors having reduced their exposure in the past.
A key indicator for investor sentiment will come after Palantir reports its second-quarter earnings. Expectations are rising, and a potential correction could be on the horizon, given the convergence of institutional buying and selling. As such, investors should exercise caution and consider a valuation adjustment sooner or later.
Palantir’s growth story is undeniable, but its share price trajectory raises concerns about sustainability. A more nuanced approach to understanding market sentiment and evaluating valuation will help investors make informed decisions about the company’s prospects.
Source: https://www.fool.com/investing/2025/07/26/after-soaring-nearly-100-so-far-this-year-where-wi