TLDR
- Jim Cramer described Palantir as a “ridiculously expensive stock” but still recommended it for long-term investment portfolios
- Palantir shares fell about 3% Wednesday after hitting a record high of $133.17 on Tuesday
- The stock has surged more than 70% this year, making it one of 2025’s top performers
- Federal government has expanded Palantir’s Foundry platform to at least four agencies including Department of Homeland Security
- Bank of America analysts call Palantir a “market definer” for companies leveraging artificial intelligence
Palantir Technologies stock took a breather Wednesday, dropping about 3% after reaching fresh all-time highs. The pullback came as investors locked in profits following Tuesday’s record close at $133.17.
The data analytics company has been a standout performer this year. Shares have climbed more than 70% since January, putting the stock among 2025’s biggest winners.
Jim Cramer recently weighed in on Palantir during his show, calling it a “ridiculously expensive stock.” Despite the valuation concerns, he still included it in his recommendations for long-term portfolios.
The Mad Money host was discussing investment options for a hypothetical baby with $1,000 to invest. He emphasized the need to take calculated risks with money that can compound over decades.
Cramer’s comments highlight the tension many investors feel about Palantir’s sky-high valuation. The stock trades at premium multiples compared to traditional software companies.
But Wall Street analysts remain bullish on the company’s prospects. Bank of America has labeled Palantir a “market definer” for businesses looking to use artificial intelligence.
Government Contracts Drive Growth
The federal government has become a major growth driver for Palantir. The New York Times reported that at least four agencies now use the company’s Foundry platform.
The Department of Homeland Security and Health and Human Services Department are among the agencies that have integrated Foundry. The platform helps organizations analyze complex data and make better decisions.
Government contracts provide Palantir with steady, predictable revenue streams. These deals often span multiple years and come with built-in renewal options.
The company’s government business has been expanding beyond traditional intelligence work. Civilian agencies are now adopting Palantir’s tools for various data analysis needs.
This diversification within government clients reduces Palantir’s reliance on defense and intelligence contracts. It also opens up new revenue opportunities across federal agencies.
Wall Street Remains Optimistic
Despite valuation concerns, institutional investors continue backing Palantir. Wedbush named it one of their “top names to own in 2025” back in March.
The firm sees Palantir benefiting from the broader artificial intelligence boom. Companies across industries are seeking better ways to analyze their data.
Retail investors have also embraced the stock throughout its remarkable run. Social media platforms frequently feature discussions about Palantir’s potential.
The combination of institutional and retail support has helped fuel the stock’s impressive gains. Trading volume remains elevated as both groups continue accumulating shares.
Professional money managers appreciate Palantir’s recurring revenue model. The company’s software-as-a-service approach generates predictable cash flows.
Wednesday’s pullback appears to be routine profit-taking rather than fundamental concerns. The stock had climbed steadily for several sessions before the retreat.
Palantir closed Tuesday at its highest level ever, marking another milestone in the company’s remarkable 2025 performance as federal agencies continue expanding their use of the Foundry platform.
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