TLDR
- Palantir stock has soared over 106% in 2025, driven by retail investor enthusiasm
- Short-seller Andrew Left calls valuation “so absurd” and predicts 50% correction
- Stock trades at 240x forward P/E, making it the most expensive in S&P 500
- Wall Street analysts remain bearish with only 7 of 29 rating it a buy
- Databricks emerges as key competitor with $100 billion private valuation
Palantir stock has become a battleground between retail investors and Wall Street pros. The data analytics company has returned more than 106% this year, but analysts warn the party can’t last.
The stock sits as the seventh-most owned on Robinhood Markets despite trading outside the top 25 U.S. companies by market cap. This retail backing has pushed shares to levels that make traditional Wall Street uncomfortable.
Short-seller Andrew Left made headlines in August when he called Palantir’s valuation “so absurd” on Fox Business. He predicted a 50% correction, stating there’s never been a company with such multiples that didn’t get cut in half.
Since Left’s warning, Palantir stock has dropped 17%. His prediction appears to be playing out, though the stock remains far above reasonable levels by traditional metrics.
Wall Street’s Valuation Concerns
The numbers paint a stark picture. Palantir trades at roughly 240 times forward earnings and 90 times sales. This makes it the most expensive stock in the entire S&P 500.
Even with analysts expecting 35% revenue growth in both 2026 and 2027, the valuation looks stretched. The lowest Wall Street price target sits 70% below current levels.
Only seven of 29 analysts rate the stock a buy or equivalent. The consensus sees much more downside than upside potential.
Left has moved beyond just shorting Palantir. He’s backing competitor Databricks, which just earned a $100 billion private valuation.
The Databricks Challenge
Left sees Databricks as Palantir’s biggest threat outside the hyperscaler cloud companies. He argues Databricks grows faster, runs a true software-as-a-service model, and doesn’t depend on government contracts.
His math is simple but damaging. If Databricks deserves $100 billion, then Palantir should trade around $40. That’s 75% below current prices.
The comparison highlights Palantir’s government contractor status as both strength and weakness. Government contracts provide stability but limit growth potential compared to pure commercial software plays.
Databricks remains private with no immediate IPO plans. But if it goes public, it could directly compete for investor dollars currently flowing to Palantir.
Palantir’s recent financial performance has been strong. Revenue grew 48% last quarter with U.S. commercial sales jumping 93%. Operating margins expanded to 46%, giving the company a Rule of 40 score of 94.
The Artificial Intelligence Platform launched in 2023 has driven much of this growth. It allows users to interact with Palantir’s data platform using natural language, making the technology more accessible.
But even strong execution can’t justify extreme valuations forever. Palantir would need to grow revenue at 50% annually for three years with no stock price movement to reach merely “expensive” territory.
The current analyst price target average of $154.47 suggests just 0.89% upside from recent levels. This lukewarm outlook reflects Wall Street’s valuation concerns.
Retail investors continue backing the stock despite professional warnings. This dynamic has created one of the most polarized situations in today’s market.
The stock’s recent 18% drop since Left’s August comments shows cracks may be forming in retail support. Whether this marks the beginning of the correction Left predicted remains to be seen.
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