Palantir’s (PLTR) rip-roaring rally over the past year has left analysts worried about the AI software stock due to its now high valuation. Indeed, RBC Capital, along with five-star Jefferies analyst Brent Thill, both expect the stock to fall substantially, with price targets of $40 and $60, respectively. In addition, Thill called the current valuation of 80 times expected 2025 revenue “irrational.” Meanwhile, DA Davidson’s five-star analyst, Gil Luria, said that although the company is growing fast and profitably, high valuations rarely last. He pointed out that a weak quarter, increased competition, or cuts to U.S. federal spending could all bring the stock down.
Separately, William Blair analyst Louie DiPalma said that Palantir’s stock could keep rising if it wins more government contracts or grows its U.S. commercial business. In fact, Palantir recently secured a $30 million contract with ICE and a $178 million deal with the U.S. Army. Still, DiPalma expects revenue growth to slow in late 2025 and early 2026 because of competition. At the same time, Luria added that Palantir’s work with U.S. government agencies like ICE might hurt its image in Europe, where the company has already faced challenges gaining traction.
It is worth noting that in its Q1 2025 earnings, Palantir reported that international commercial revenue fell 5% from last year due to slow demand in Europe. Interestingly, since 2023, executives have said that European clients are hesitant to invest heavily in AI and are focusing more on supporting local tech companies. Luria also told Yahoo Finance that Palantir’s ties to the Trump administration and its U.S. defense contracts may make European buyers uncomfortable.
Is PLTR Stock a Buy?
Overall, analysts have a Hold consensus rating on PLTR stock based on three Buys, 11 Holds, and four Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average PLTR price target of $98.56 per share implies 15.3% downside risk.
