Palantir Technologies’ stock has soared nearly 370% in the past year, leaving many experts bewildered. The company’s forward price-to-earnings (P/E) ratio has skyrocketed to 200x on adjusted earnings, but investors are asking whether this valuation is justified.
The AI platform company has indeed validated its business model, but bulls risk ignoring warning signs of a potential collapse if they become too enthralled with the hype surrounding Palantir’s stock. As such, it’s essential for investors to exercise caution when considering AI stocks that are valued significantly above their actual prospects.
In reality, Palantir’s growth rates may not justify the extreme valuations seen in the market today. Investors must be mindful of the risks associated with getting caught up in the excitement surrounding these companies and ensure they make informed decisions rather than falling prey to irrational exuberance.
Source: https://seekingalpha.com/article/4756450-palantir-dont-gamble-with-your-money