You ever watch a firework go up so fast and so bright that for a second, you forget the part where it has to explode? That’s what I see when I look at Palantir right now. It’s dazzling, it’s loud, it’s impossible to ignore, and the crowd is cheering like they’ve already seen the grand finale. The only problem? We’re still mid-air, and gravity hasn’t had its say yet. Palantir Technologies—this once-shadowy data analytics company turned AI darling—has been on an absolute tear. I mean, the numbers are insane. We’re talking 340% in 2024, and as if that wasn’t enough, another 130% already in 2025. That’s not growth, that’s a rocket booster strapped to a rocket booster. And sure, when you report your first quarter with over a billion dollars in revenue, with 48% year-over-year growth, and U.S. commercial contracts jumping by more than 200%, it’s not hard to see why people are drunk on the story.
But here’s where my alarm bells start ringing: the story is so intoxicating, so perfectly built for this AI-obsessed market, that it feels like the valuation has broken free from the tether of reality. You don’t get to 70-times projected revenue without entering a realm where fundamentals become an afterthought. I mean, I’ve seen people compare Palantir’s multiples to Alphabet’s, Tesla’s, and Meta’s—and honestly, those comparisons make Palantir look like it’s playing a completely different sport. I’ve seen numbers as high as 800× forward earnings. That’s the kind of math that says, “We’re betting not just on success, but on near-perfection, forever.” And in markets, perfection is usually where disappointment starts.
The analysts—at least the ones not mainlining the hype—are starting to whisper about this too. The Motley Fool’s talking about seven reasons it could plunge 60%. Morgan Stanley’s got it at “underweight.” Trivariate Research has straight-up compared it to bubble-era biotech stocks. When you hear those kinds of comparisons, you don’t ignore them. You remember what happened to the folks who bought Cisco at the top of the dot-com boom. You remember all the “can’t-miss” AI, VR, blockchain, or clean-tech plays that turned out to be can’t-miss… if your goal was to miss your retirement targets.
And the thing is, Palantir is a real company. It’s not like they’re selling nothing. Gotham and Foundry are serious platforms with serious use cases—government contracts, commercial clients, defense projects, AI-driven analytics. They’re not Theranos, they’re not a scam. But that doesn’t mean they can’t be overpriced to the point where you’re basically paying for two Palantirs, three future Palantirs, and the dream of a magical Palantir that solves world hunger. And government contracts? They’re both a blessing and a curse. They bring stability, but they also have a ceiling. You can’t sell Gotham to just anyone. It’s restricted to allies, and the scope is limited. Commercial growth is exciting, but even there, they’re competing in a brutal AI arms race where hype can outrun adoption by years.
Let’s talk about hype for a second. AI hype in particular. Remember when every company was “pivoting to blockchain” in 2017? Or when 3D printing was going to change the world, and those stocks went parabolic? AI is different in that it’s real, it’s here, it’s transforming workflows. But just because the tech is real doesn’t mean the valuations aren’t fictional. Investors have this nasty habit of pricing in not just success, but world domination, as if nothing could possibly go wrong. But things do go wrong. They always do. A single missed quarter, a government budget cut, an ethical scandal—it doesn’t take much to pop an air-filled stock price.
And Palantir is sensitive to news. Remember earlier this year when reports of Pentagon budget restraints came out? Boom—10% drop in a heartbeat. That’s the reality of being tied so closely to government spending. You’re also tied to the mood of politicians, the mood of voters, and the messy unpredictability of geopolitics. Add to that the ongoing political and ethical scrutiny Palantir gets for its work with agencies like ICE, and you’ve got a reputational risk that never fully goes away. I’m not saying it’ll tank the business, but these things can hurt growth just enough to make an overvalued stock wobble.
And oh, the retail investor army. You know the type—loud on Reddit, making YouTube videos titled “Palantir TO THE MOON,” quoting Alex Karp like he’s a philosopher-king. The enthusiasm is admirable, but it’s also dangerous. Retail passion can keep a stock aloft way past where fundamentals would normally bring it back down, but when that passion turns—when those same investors see a 30% drop and panic—that’s when the floor can vanish. Meme stocks taught us that liquidity cuts both ways.
Speaking of Alex Karp, let’s not ignore the fact that he’s been selling. A lot. Nearly $2 billion worth in 2024, and plans to sell another 10 million shares by September. I get it—founders diversify, they cash out. But timing matters. When the captain starts quietly stepping off the boat while everyone else is still singing shanties about how unsinkable it is, you at least start asking where the lifeboats are.
Now, maybe you’re thinking, “So what? If Palantir’s still growing like crazy, why not ride the wave?” Fair question. I’m not here to tell you the company’s doomed. I’m telling you the stock is priced like the company can do no wrong for the next decade, and that’s the kind of bet that rarely pays off. Diversification matters here. If you’ve got Palantir as a spicy side dish in your portfolio, fine. If it’s your main course, and dessert, and breakfast tomorrow morning, you’re gambling, not investing.
Here’s the move I see smart money making: staged entries, staged exits. No one’s buying in all at once. They’re nibbling, taking profits on the way up, and not falling in love with the ticker. They’re setting stop-losses or at least mental exit points. They’re watching for cracks in the growth story—like slowing commercial adoption or signs that AI competition is eroding margins. And they’re keeping an eye on policy changes, because if the U.S. government shifts its spending priorities, Palantir’s revenue mix makes it too exposed to ignore.
And here’s the part people hate to hear: waiting for the bubble to burst before you act is a terrible idea. In theory, it sounds smart—you’ll just hop out right before it crashes, then buy back in cheap. In reality, by the time you feel the drop, it’s already too late. Markets fall faster than they rise, and bottoms are only visible in hindsight. The folks who swore they’d “sell if it ever fell 20%” usually end up holding it at -60%, telling themselves it’ll bounce back any day now.
I’ve seen this movie before, in tech, in energy, in real estate. The names change, the tech changes, the buzzwords change, but the pattern? It’s the same. Explosive growth, insane valuation, analyst warnings drowned out by investor euphoria, a catalyst that shifts sentiment, and then—snap—the air comes out. Sometimes it’s a slow leak, sometimes it’s a blowout. Either way, the people who got in late, without a plan, are the ones left holding the bag.
So what do you do? You decide right now if Palantir is an investment or a speculation for you. If it’s an investment, you size it so a 50% drop won’t wreck your portfolio, and you keep your eyes on execution, not headlines. If it’s a speculation, you treat it like one—you play the momentum, you take profits aggressively, and you don’t pretend it’s a forever hold unless the fundamentals grow into the price, which right now they have a very long way to go.
Could Palantir keep running higher from here? Absolutely. Bubbles always overshoot before they burst. Could it double again before correcting? I wouldn’t rule it out. But if you’re in this thing without a plan, thinking you’ll know when to get out because “you’ll feel it,” you’re playing with fire. And the higher this thing goes without a valuation reset, the less oxygen it has at the top.
I’m not telling you to hate Palantir. I’m telling you to respect what’s happening and to respect the risks. You can admire the growth, you can marvel at the contracts, you can appreciate the tech, and still admit that the stock’s pricing has gone into fantasy mode. That’s not cynicism—that’s survival. And in this market, survival is underrated.
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