Palantir (PLTR): Overvalued or a Buy-the-Dip Opportunity?

📉 Recent Selloff

Palantir has been sliding for over a week, with one session seeing a sharp 9% drop — its longest losing streak in over a year.

The trigger: Short seller Citron Research (Andrew Left) called PLTR “detached from fundamentals”, arguing it should be worth closer to $40.

As a result, billions in market cap evaporated, with short-sellers booking large gains.

💰 Valuation Concerns

PLTR trades at 214× forward earnings, compared to the S&P 500 average of ~22×.

Analysts are split: only a handful rate it “Buy,” while most lean “Hold” or “Sell.”

Some critics — including The Economist — have called it one of the most overvalued firms ever.

Price targets range wildly, from $45 on the low end to $210+ on the high end.

🚀 Growth Story & Bull Case

Revenue momentum: 8 consecutive quarters of growth acceleration, with improving margins.

Sticky government contracts: Core business remains robust and predictable.

AI Platform (AIP): Strong adoption in both government and commercial segments, seen as Palantir’s future growth engine.

Guidance: Management has raised full-year expectations.

Long-term vision: Some bulls argue Palantir could one day scale toward a $1T valuation, citing parallels to early Tesla or Amazon.

⚠️ Risks & Bear Case

Excessive multiples: Valuation priced for perfection — any slowdown could hit hard.

Macro backdrop: Higher-for-longer interest rates would pressure growth multiples.

Insider selling: CEO Alex Karp and other execs have sold millions in stock, raising eyebrows about confidence at current levels.

Sentiment shifts quickly: Retail traders helped fuel the rally, but momentum cuts both ways.

🔎 Sentiment on the Street

Bulls: See Palantir as a generational AI play with sticky government revenues and massive commercial upside.

Bears: Say it’s a great company but a bad stock at this price. Even retail investors on forums like Reddit admit it feels “way overvalued.”

✅ Bottom Line

If you’re long-term bullish on AI + government contracts: This dip could be a reasonable entry point, though expect volatility.

If you’re value-driven or conservative: PLTR remains expensive relative to fundamentals; patience might reward you with a cheaper entry.

Verdict: Palantir is still a high-risk/high-reward stock. The selloff may offer a buying opportunity for conviction investors, but for cautious players, the valuation remains too stretched to justify piling in just yet.