Palantir (PLTR) quickly emerged as a top-tier pick for investors chasing the artificial intelligence (AI) revolution, and it’s easy to see why. Palantir brings years of experience in AI-powered data analytics. What really sets it apart, though, is its elite customer base of governments across the globe, relying on Palantir’s tech to power mission-critical operations. It’s a competitive edge that very few companies can claim. 

But after a monster rally in 2024, Palantir has hit some turbulence in 2025. Like many stocks, this AI player hasn’t been spared from market volatility, largely driven by President Donald Trump’s “Liberation Day” tariff threats and rising trade tensions, particularly with China. Although the stock has bounced back sharply following the announcement of a 90-day reciprocal tariff pause, shares are still down more than 25% from their February highs. So, with sentiment shifting and the pullback in play, is now the perfect time to buy the dip in PLTR? 

About Palantir Stock

Denver-based Palantir Technologies (PLTR) has built a powerful AI platform (AIP) designed to function as an operating system for the real world, connecting digital assets to their physical counterparts and enabling users to apply AI directly to real-world challenges.

With a market cap hovering around $213 billion, Palantir has certainly felt the sting of recent volatility, tumbling 25% from its February peak of $125.41. Yet, even with this sharp pullback, the stock’s longer-term performance remains nothing short of spectacular, up a staggering 348% over the past year, leaving the S&P 500 Index’s ($SPX) 5.3% gain in the dust during the same period. And while the broader market has slipped nearly 10.4% year-to-date, Palantir is still firmly in the green, boasting a solid 24.3% gain in 2025.

Valuation concerns are nothing new for a high-flyer like Palantir. Even after some recent price swings, the stock is still up triple digits in 2024 and holding strong in 2025. But that kind of rally comes at a cost. Palantir now trades at an eye-popping 292 times forward earnings and 76.7 times sales, dwarfing sector medians of 18.89x and 2.56x, respectively. 

Palantir Surges on Q4 Earnings 

The AI darling pulled back the curtains on its rosier-than-expected fourth-quarter earnings report on Feb.3, which sparked a more than 23% surge in its shares in the very next trading session. The company posted a notable 36% year-over-year revenue jump to $828 million, surpassing analyst forecasts by roughly 6.7%. Even more impressive, adjusted EPS surged 75% from the previous year to $0.14, crushing Wall Street estimates with a solid 23.7% beat.

The AI software leader’s standout performance in the final quarter of fiscal 2024 was fueled by a robust 52% year-over-year surge in U.S. revenue, reaching $558 million. The U.S. commercial segment led the charge, with a striking 64% jump in revenue to $214 million, while the government business also delivered solid growth, posting a 45% increase to $343 million.

Demonstrating its strong contract-winning capabilities, Palantir secured 129 deals valued at over $1 million, 58 worth more than $5 million, and 32 exceeding $10 million, further solidifying its growing influence in both the commercial and government sectors. With a robust balance sheet boasting around $5.2 billion in cash, cash equivalents, and short-term U.S. Treasury securities, Palantir is well-positioned to drive innovation, seize new opportunities, and weather market volatility with confidence.

Looking forward to fiscal 2025, management anticipates revenue to range between $3.741 billion and $3.757 billion, while U.S. commercial revenue is expected to be over $1.079 billion, representing a growth rate of at least 54%. On the profitability side, the company expects adjusted operating income of $1.551 billion to $1.567 billion. Plus, Palantir also expects to achieve GAAP operating income and net income every quarter this year, showcasing its solid financial momentum.

What Do Analysts Expect for Palantir Stock?

Even with very limited tariff exposure and a blowout quarter Q4 earnings report, Palantir hasn’t fully won over Wall Street just yet, with analysts sticking to a consensus “Hold” rating overall. Of the 20 analysts offering recommendations, only three advocate a “Strong Buy,” 12 give a “Hold,” one maintains a “Moderate Sell,” and the remaining four suggest a “Strong Sell.” 

While PLTR stock is already trading premium to its average price target of $84, its Street-high target of $125 suggests almost 33% potential upside from current price levels.