If I buy Palantir Technologies now, will I be able to survive forever?
last time Palantir Technologies (PLTR +1.25%) The stock price has fallen as much as it did in April 2025. Investors who bought on the dip ended the year with an incredible 140% gain.
History is full of examples of how investing in promising growth stocks when they have fallen significantly can result in life-changing returns. If I buy Palantir today, will it last a lifetime?
today’s change
(1.25%) $1.90
current price
$153.50
Key data points
market capitalization
$363 billion
work range
$151.00 – $155.88
52 week range
$66.12 – $207.52
volume
2.1 million
average volume
49M
gross profit
82.37%
Just starting?
If Alex Karp, co-founder and CEO of Palantir Technologies, is right, the answer to that question would be “yes.” “We are at the very beginning and beginning of a generational project,” Karp wrote in a recent letter to shareholders. Assuming Palantir is indeed at the beginning of its growth curve, this is a good start.
Palantir’s total revenue increased 70% year-over-year and 19% in the fourth quarter to $1.4 billion. In the past, the company relied primarily on government contracts. That is no longer the case. Palantir’s U.S. commercial revenue surged 137% year over year in the fourth quarter to $507 billion, not far behind its U.S. government revenue of $570 million.
Despite this impressive growth, why has Palantir’s stock price fallen so sharply so far? SaaS stocks have been hit by a massive sell-off. However, there is a strong case that Palantir’s withdrawal is not warranted.
Karp is likely to argue with anyone who claims Palantir is the quintessential AI stock. He wrote in a recent shareholder letter that AI models “must be tethered to objects in the real world, tethers that are the means of grounding and orientation we have built.” In Karp’s view, investing in Palantir now makes a lot of sense.
Image source: Getty Images.
Valuation vs. vision
However, there is one glaring problem. Even after Palantir’s stock price fell sharply, the stock is still trading at about 130 times forward earnings and 49 times forward sales. To call this an expensive valuation is an understatement.
Palantir will need to continue delivering tremendous growth to have any chance of justifying such a high valuation multiple. Any problems along the way will almost certainly result in another significant sell-off, probably an even bigger sell-off than what we saw in 2026.
One potential hiccup immediately comes to mind. Palantir is so closely tied to the Trump administration that if the political winds change in 2028, it could work against the company. Palantir has dramatically increased its commercial revenues, but still more than 40% of its total revenue comes from the U.S. government.
Karp’s vision for the company paints a picture of unprecedented levels of long-term, sustained growth. Perhaps he will be proven right. However, I believe other stocks offer a better risk profile for long-term investors.
