Palantir Technologies Inc. (NYSE:PLTR) has emerged as the brightest star of the S&P 500 over the past year, but its meteoric rise — up 440% in twelve months and 53% year-to-date through May 9 — is now confronting a valuation wall that even the hardest bulls are struggling to justify.
Is Palantir Trading At Bubble-Like Valuations: How High Is Too High?
With shares closing at $115 on Friday and peaking at a record $125 this week, Palantir is now trading at 500 times trailing twelve-month earnings, an outlier among all companies in the S&P 500 and Nasdaq 100.
That’s nearly triple the valuation of most AI-linked stocks and more than 14 times higher than tech heavyweights like Nvidia Corp. (NASDAQ:NVDA) and Microsoft Corp. (NYSE:MSFT), which trade at price-to-earnings ratios of 37x and 32x, respectively.
While many would argue that Palantir is a bet on the future rather than the past, even when factoring in projected earnings, the valuation picture remains extreme.
Palantir trades 190 times forward earnings, raising red flags that the price has disconnected from even the most optimistic projections.
Most Expensive S&P 500 Stocks By Trailing P/E
| Company | P/E (Last Twelve Months) |
|---|---|
| Palantir Technologies Inc. | 484.6x |
| Dayforce Inc. (NYSE:DAY) | 343.5x |
| CoStar Group Inc. (NASDAQ:CSGP) | 257.3x |
| DoorDash Inc. (NASDAQ:DASH) | 227.6x |
| Iron Mountain Inc. (NYSE:IRM) | 227.2x |
| Ventas Inc. (NYSE:VTR) | 194.0x |
| Tesla Inc. (NASDAQ:TSLA) | 164.7x |
| Axon Enterprise Inc. (NASDAQ:AXON) | 158.1x |
| Digital Realty Trust Inc. (NYSE:DLR) | 148.7x |
Most Expensive S&P 500 Stocks By Forward P/E
| Company Name | P/E (Next Twelve Months) |
|---|---|
| Palantir Technologies Inc. | 189.2x |
| Ventas Inc. | 149.8x |
| Tesla Inc. | 140.8x |
| Digital Realty Trust Inc. (NYSE:DLR) | 138.3x |
| CrowdStrike Holdings Inc. (NASDAQ:CRWD) | 118.4x |
| Axon Enterprise Inc. | 110.6x |
| Intel Corp. (NASDAQ:INTC) | 92.4x |
| Welltower Inc. (NYSE:WELL) | 86.0x |
The Bullish Case Still Has A Pulse
Despite this, investor enthusiasm remains sky-high. The company’s ability to secure lucrative defense contracts and its reputation as an artificial intelligence leader has driven continued demand for the stock, even during broader market corrections.
Palantir notably held its ground during the April selloff triggered by the Donald Trump’s tariff escalation, never breaching its 200-day moving average.
Larry Tentarelli, Chief Technical Strategist at Blue Chip Daily Trend Report, said Palantir “remains our top-ranked technology sector stock,” citing its technical strength and AI leadership.
Tentarelli said the recent earnings quarter confirmed their view and suggested any consolidation in the $100–$110 range could offer a new buying opportunity. “We view this stock as a buy here or on pullbacks,” he said.
His firm maintains a long position and sees Palantir as dominant in its niche government and commercial AI applications.
Palantir’s Analyst Consensus: Caution Ahead
Out of 25 accredited analysts covering the stock, only one rates it a ‘Strong Buy’ and just three rate it ‘Buy’. The overwhelming consensus is to ‘Hold’, with the median price target 18% below current levels.
Goldman Sachs’ analyst Gabriela Borges, CFA maintained a ‘Neutral’ rating this week and raised her 12-month price target to $90, still 22% below the current price.
“Our positive view of Palantir’s growth is balanced by longer-term ecosystem risks – the industry moving from peak custom to more off-the-shelf adoption – and the stock’s premium valuation,” Borges said.
She highlighted Palantir’s enterprise value-to-sales multiple at 81x, far exceeding the sector average of 12x, and its growth-adjusted EV/sales ratio (the so-called Rule of 40) at 0.97x, compared to just 0.28x for comparable software companies growing 20% or more.
While fundamentals are struggling to keep pace with price momentum, Palantir’s rally shows no immediate signs of collapse. Still, unless earnings growth or profitability scales up dramatically, the company may be heading toward a painful reckoning.