After a strong start to the year, Palantir Technologies (PLTR) has been dethroned as the S&P 500’s top-performing stock in 2025. Despite posting solid first-quarter results, PLTR stock dropped more than 10% over the last two days. Meanwhile, this decline had opened the door for CVS Health (CVS) to reclaim the top spot on the S&P 500 (SPX), boasting a year-to-date gain of over 48%.
Palantir Falls Hard Despite Strong Q1
In Q1, Palantir posted impressive results, with revenue hitting $884 million, topping forecasts. Meanwhile, adjusted earnings per share reached $0.13 versus the expected $0.08. For Q2 2025, the company projects revenue between $934 million and $938 million, slightly above the $899 million Wall Street consensus.
So why did the stock tumble? Despite the beat, investors were spooked by Palantir’s lofty valuation. Notably, PLTR stock is trading at 152x estimated 2026 earnings, the highest in the S&P 500 index. Analysts say the strong results were already priced in, and the company’s modest full-year guidance didn’t match the market’s sky-high expectations.
Analysts Weigh In on PLTR Stock
Following the results, multiple analysts from Jefferies, Deutsche Bank, Mizuho Securities, etc. have reaffirmed their Sell ratings on PLTR stock.
Deutsche Bank’s top-rated analyst, Brad Zelnick, acknowledged Palantir’s strong AI positioning and government potential, but also warned that it’s the most expensive stock in their coverage, with a valuation far above peers. However, Zelnick raised his price target on PLTR from $50 to $80 while maintaining his Sell rating.
Similarly, four-star-rated analyst Gregg Moskowitz at Mizuho Securities raised his concerns over the company’s high valuation. He stated that the stock is near all-time highs, reminiscent of levels seen before past selloffs. With Palantir trading at a lofty 60x the estimated 2026 revenue, Moskowitz believes much of the expected growth is already priced in.
On the flip side, Wedbush analyst Dan Ives views Palantir as a “generational tech name” with substantial long-term potential. Ives kept his Buy rating on PLTR stock after Q1 results, and raised his price target to $140 from $120.
Is PLTR Stock a Good Buy?
Overall, Wall Street has a Hold consensus rating on PLTR stock, based on three Buys, 11 Holds, and four Sells assigned in the last three months. The average Palantir share price target is $98.25, which implies a downside potential of 11% from current levels.
