In 2025, Palantir Technologies has become one of Wall Street’s brightest stars. On August 12, the stock reached an intraday high of $190, a gain of more than 150% since the start of the year. For a brief moment, it was the best-performing stock in the S&P 500. Since then, the shine dulled. Shares fell by as much as 25%, before clawing back part of those losses. Even now, at around $167, they remain below their record high, yet far above the 52-week low of just $33.62.
Palantir Technologies Inc. (PLTR)
It’s a familiar tale. Technology stocks often capture the imagination of investors, who see not just a company but a vision of the future. Palantir is no exception. Its software—long embedded in defense, intelligence, and enterprise systems is increasingly tied to artificial intelligence, the most hyped technological frontier of the decade. Partnerships with Lumen in telecommunications and Lear Corp. in automotive technology show how far the company’s reach is extending.
But is the price justified?
Lessons From Past Manias
Markets have seen this story before. In the mid-1800s, railroads were the disruptive technology of their time. Investors piled in, betting on a future of iron tracks connecting cities and markets. Many fortunes were made, but just as many were lost when overbuilding and financial speculation led to repeated crashes, such as the Panic of 1873.
A century later, the “Nifty Fifty” stocks of the 1960s and 70s (giants like Xerox, IBM, and Polaroid) were considered “one-decision” stocks: buy them and never sell. Investors were so certain of their dominance that they paid almost any price. When inflation, recession, and competition struck, the valuations collapsed, and some of those titans never recovered.
Then came the dot-com boom of the 1990s, when companies with little more than a website and a dream soared to dizzying heights. Amazon survived and thrived, but thousands of others vanished. The common thread was always the same: a belief that new technology justified new rules of valuation.
Palantir in Context
Palantir today is no railroad start-up with no profits, nor is it a dot-com without revenue. It has real customers (governments, corporations, and now industrial partners) and its software solves genuine problems. But the valuation is steep. Its P/E ratio suggests investors are pricing in years of perfect execution and outsized growth. That leaves little cushion if growth slows, contracts stall, or broader market conditions turn sour.
History shows that investors often overestimate the speed of change while underestimating the eventual impact. Railroads did change the world, as did computers and the internet but not always at the pace or in the way early investors imagined. The winners endured, but along the way came sharp booms and brutal busts.
Echoes and Warnings
The current enthusiasm for Palantir feels like an echo of those earlier cycles. It is the right company in the right place at the right time—AI, defense, and big data all converge in its story. Yet echoes of past manias caution us: timing matters. Those who bought Amazon at the peak of 1999 had to wait nearly a decade to break even, even though Amazon ultimately became one of the greatest success stories in corporate history.
Palantir’s story may unfold in ways similar to past innovators. Its long-term potential could be substantial, though how it progresses in the near term is uncertain. Markets have often moved in waves of optimism and reassessment, and Palantir’s journey may simply become another interesting chapter in that continuing history.
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