To The Moon

$Palantir Technologies Inc.(PLTR)$ has seen significant stock appreciation recently, surging over 80% year-to-date in 2025.

Palantir (PLTR) has been on a tear lately, and its strong run during the week of June 25, 2025, is being driven by a potent mix of AI-fueled optimism, strategic partnerships, and geopolitical tailwinds—despite its sky-high valuation.

In this article I would like to discuss what is actually fueling the rally and also why I have both PLTR and NVDA in my portfolio for better risk/reward balance.

AI Momentum & Strategic Deals: Palantir has inked major AI partnership deals that have captured investor imagination. Its platforms are increasingly seen as critical infrastructure for both government and commercial clients, especially in defense and intelligence sectors.

Geopolitical Catalysts: The ongoing conflict between Israel and Iran has spotlighted Palantir’s relevance in defense tech. While there’s no official confirmation of its tech being deployed, the narrative alone has been enough to boost sentiment.

Strong Technicals & Institutional Interest: PLTR recently hit a new all-time high, trading well above its 50- and 200-day moving averages. Despite a P/E ratio north of 600 and a P/S ratio over 115—far exceeding peers like Nvidia and Microsoft—investors are betting on future dominance in AI.

Retail & Momentum-Driven Buying: The stock has become a momentum favorite, with retail traders and some institutions piling in, even as analysts remain split. Some price targets are well below current levels, but the bullish narrative is overpowering valuation concerns—for now.

In short, the market seems to be saying: “Yes, it’s expensive—but what if it’s the next $2 trillion AI titan?”

Speculative Growth Potential: Despite its high valuation (with a price-to-sales multiple significantly higher than industry averages), many investors are focusing on Palantir's long-term growth potential in the booming AI sector. There's speculation about Palantir's path to a $1 trillion market cap, driven by accelerating growth rates and increased government spending.

While valuation concerns are frequently raised by analysts, the ongoing strong demand for its AI platforms, consistent financial performance, and strategic positioning in critical sectors seem to be outweighing these concerns for many investors in the current market environment.

High Valuation Remains a Concern

Despite the clear potential for growth, Palantir's valuation is a significant point of contention for many analysts and investors.

Exorbitant Price-to-Earnings (P/E) Ratio: As of late June 2025, Palantir's forward price-to-earnings ratio is around 240x, significantly higher than the sector median (around 24x) and even other high-growth software companies like Snowflake (16x P/S) and CrowdStrike (22x P/S) that have similar or even slightly lower growth rates. A P/E of 643.7x based on trailing earnings further highlights this. This indicates that investors are pricing in an extraordinary amount of future growth and profitability.

High Price-to-Sales (P/S) Ratio: Similarly, its price-to-sales ratio is approximately 66x revenues. For comparison, many high-growth software companies are considered expensive at P/S ratios above 20-30x. This suggests that Palantir needs to sustain outsized revenue growth and margin expansion for a very long period to justify its current valuation.

Analyst Skepticism: While some analysts are bullish, a significant portion of Wall Street remains cautious. The average analyst price target is often below the current stock price, implying a downside. This indicates a disconnect between market enthusiasm and traditional valuation metrics. Citi, for instance, has warned of overvaluation.

Dependence on Government Contracts: While a strength in times of conflict, a heavy reliance on government contracts (around 55% of sales in 2025 are estimated to come from government, though US government revenue as a percentage of total revenue has been decreasing) introduces risk. Shifts in government budgets, political priorities, or changes in administration could significantly impact revenue. Critics also highlight the ethical concerns and potential for public backlash associated with its involvement in surveillance and military operations, which could create long-term reputational risks.

Ethical Considerations and Public Scrutiny: Palantir's involvement in sensitive government and defense operations, particularly in conflict zones, draws considerable ethical scrutiny. Allegations of complicity in human rights violations, as seen in the context of the Israel-Gaza conflict, can lead to negative public sentiment, employee resignations, and potential pressure from activists or regulatory bodies. While this doesn't directly impact the immediate financial profitability from contracts, it can influence long-term brand perception, talent acquisition, and investor sentiment, particularly among ESG-focused funds.

But if we were to do a side-by-side comparison of PLTR’s valuation metrics versus other AI plays like SNOW, PATH, or NVDA? That might help us gauge whether this is momentum worth chasing or a bubble waiting to pop.

Valuation Metrics Of PLTR, SNOW, PATH and NVDA

Below is a side-by-side snapshot of key trailing-twelve-month (TTM) valuation multiples for Palantir (PLTR), Snowflake (SNOW), UiPath (PATH) and NVIDIA (NVDA) as of the week of June 25, 2025. All metrics come from company filings and/or consensus estimates where noted.

Sources

NVDA vs. PLTR: P/E, P/S, P/B, EV/EBITDA, EV/Sales, PEG — SeekReturns (Jun 15 2025)

Snowflake (SNOW) trailing 12 mo. and forward multiples — Yahoo Finance consensus (estimates as of Jun 24 2025)

UiPath (PATH) trailing 12 mo. and forward multiples — Yahoo Finance consensus (estimates as of Jun 24 2025)

NVDA forward P/E — The Motley Fool (Feb 2024)

So what does the above table tells us :

Palantir (PLTR) sits at the extreme of every multiple, reflecting sky-high expectations (and risks) if it can scale revenue and margins.

$Snowflake(SNOW)$ and $UiPath(PATH)$ trade at rich P/S but much lower P/B and EV multiples versus PLTR, suggesting investors price in continued hypergrowth but with somewhat more mature margin profiles.

$NVIDIA(NVDA)$, while still expensive on a P/S and P/E basis, is far below PLTR, and its forward P/E (35×) embeds robust earnings growth without the “quadruple-digit” multiples.

A PEG above ~1 typically flags overvaluation; PLTR’s ~20× PEG is the biggest outlier, whereas SNOW, PATH and NVDA look expensive yet closer to “growth‐justified” territory.

Bottom line: PLTR’s run is momentum-driven and steeply valued. If we are hunting for AI exposure with a more defensible multiple profile, SNOW, PATH or even NVDA may offer a better risk/reward balance than PLTR’s blow‐off valuation. This is why I have both PLTR and NVDA in my portfolio for better risk/reward balance.

Split Sentiment Among Analysts On PLTR and AI Peers

Analysts are split on Palantir (PLTR) and its AI peers, with sentiment ranging from cautious optimism to outright skepticism—especially when it comes to valuation.

🔍 Palantir (PLTR)

• Consensus Rating: Hold

• Breakdown: 4 Buys, 5 Holds, 6 Sells

• Average Price Target: ~$63, implying a 14–25% downside from current levels

• Analyst Concerns: Despite strong momentum and a 300%+ gain over the past year, analysts worry PLTR is overextended. Valuation multiples are sky-high, and some see limited near-term upside unless revenue growth accelerates dramatically.

💾 Snowflake (SNOW)

• Consensus Rating: Moderate Buy

• Analysts appreciate its strong data cloud platform and recurring revenue model. However, concerns linger about slowing growth and high operating costs. Its valuation is rich, but not as extreme as PLTR’s.

🤖 UiPath (PATH)

• Consensus Rating: Hold to Moderate Buy

• PATH is seen as a niche AI automation play with improving fundamentals. Analysts are cautiously optimistic, especially as it narrows losses and grows enterprise adoption.

🧠 NVIDIA (NVDA)

• Consensus Rating: Strong Buy

• Average Price Target: ~$661, suggesting 38% upside from current levels

• Analysts are overwhelmingly bullish, citing its dominant position in AI infrastructure and accelerating demand for GPUs. Even with a high P/E, NVDA is seen as having the most defensible growth story.

RSI Momentum Showing Strong Against The Technology Sector For PLTR and NVDA

While we need to be able to balance our portfolio for better risk/reward, it is important to understand how the underlying stocks are performing against the sector, in this case, it will be the S&P 500 Technology.

I am using the RSI momentum on the weekly timeframe to make a comparison, as we can see that both the stocks are on an upward trend with PLTR performing much better, and the RSI is also moving towards the oversold region, so what does this tell us?

This would mean that we would continue to see the weekly uptrend continue to build higher, and the bulls are in control currently, and the strength would most likely push for a weekly trend continuation.

Summary

Palantir is undeniably positioned to benefit financially from increased geopolitical tensions and the associated rise in defense spending due to its cutting-edge AI and data analytics platforms.

However, its sky-high valuation suggests that much of this potential growth is already priced into the stock. Investors must weigh the strong growth catalysts against the significant valuation risk and the inherent ethical complexities of its business model.

Analysts are most bullish on NVIDIA, viewing it as the AI arms dealer with tangible earnings power. Palantir, while exciting, is seen as a high-risk, high-reward bet—more of a momentum darling than a fundamentals-driven pick. Snowflake and UiPath sit somewhere in between, offering growth with slightly more grounded valuations.

Appreciate if you could share your thoughts in the comment section whether you think it would be a better idea to balance PLTR momentum darling with another fundamentals-driven AI stocks.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.