TLDR:
- Palantir (PLTR) stock has surged over 300% in 52 weeks, now trading above $116 per share with a $252 billion market cap
- Q4 2024 showed strong performance with revenue up 36% YoY to $828 million, including 64% growth in U.S. commercial revenue
- Company closed 129 deals worth over $1 million each in Q4 2024, up from 104 in Q3
- Wall Street maintains a Hold consensus with average price target of $88.60, suggesting 24% downside
- Analysts warn current growth rate may not justify stock valuation despite positive business outlook
The data analytics company Palantir Technologies has seen its stock price soar in early 2025, climbing from under $20 at the start of 2024 to over $116 per share. This surge has pushed the company’s market capitalization to $252 billion, raising questions about valuation among market analysts.
Fourth quarter results for 2024 showed continued momentum in Palantir’s business operations. The company reported revenue of $828 million, marking a 36% increase compared to the same period last year. This growth was particularly strong in the U.S. commercial sector.
The company’s U.S. commercial revenue grew by 64% year-over-year in the fourth quarter, outpacing the government sector’s growth of 45%. Looking ahead to 2025, Palantir projects its U.S. commercial sales will maintain strong growth of at least 54%, targeting approximately $1.08 billion.
Deal flow showed notable strength in the fourth quarter of 2024. Palantir secured 129 contracts valued at over $1 million each, up from 104 such deals in the third quarter. These contracts span both government and commercial clients.
The company’s government business, which accounts for approximately 55% of total revenue, continues to benefit from global defense and security contracts. Palantir’s software products, including Gotham and Foundry, are being used for data analysis and security solutions.
Commercial customers, representing about 45% of revenue, are increasingly adopting Palantir’s platforms for business data analysis and protection of sensitive information. The company’s AI capabilities have become a key selling point for both government and commercial clients.
Cautious Stance
Despite the positive business metrics, Wall Street analysts maintain a cautious stance on the stock. Current consensus shows two Buy ratings, ten Hold ratings, and five Sell recommendations, with an average price target of $88.60.
Daniel Kern, Chief Investment Officer for Nixon Peabody Trust Company, expressed concern about the stock’s valuation while praising the company’s business fundamentals. He noted that while Palantir may be a “long-term winner,” the current stock price may have moved too far ahead of the company’s growth rate.
The stock’s performance has been particularly strong in 2025, gaining over 50% year-to-date and ranking as the top performer in the S&P 500. This comes amid broader market enthusiasm for artificial intelligence-related stocks.
Barry Bannister of Stifel has warned about the overall AI-led bull market, suggesting that macroeconomic factors including sticky inflation and potential delays in Federal Reserve rate cuts could impact tech valuations.
Palantir’s software offerings continue to expand, with products including Palantir Gotham for data analysis, Foundry for enterprise operations, and Apollo for cloud-based operations. These tools are being used across various sectors from defense to corporate operations.
The company’s AI integration capabilities have attracted particular attention from investors. Palantir’s ability to help companies implement and monetize AI solutions has been cited as a key growth driver.
Year-over-year growth metrics show consistent expansion across both government and commercial sectors. The company’s ability to secure larger contracts has demonstrated strong market demand for its products.
The mix between government and commercial revenue continues to evolve, with commercial growth outpacing government sector expansion. This diversification has been viewed positively by some market observers.
Looking at the most recent quarter, Palantir’s deal closure rate and contract values suggest strong market acceptance of its products, though analysts continue to debate whether these metrics justify the current stock price.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
