It’s easy to get carried away when discussing Palantir Technologies (NASDAQ:PLTR), the big data analytics company that uses AI to improve decision-making. The company has grown by leaps and bounds over the past few years, and its share price has risen by almost 400% over the past twelve months.
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The momentum was on full display last quarter. Palantir’s Q2 2025 revenues topped $1 billion for the first time ever, which represented a 48% year-over-year growth rate. Founded with a vision to support U.S. security agencies, the company has also clearly planted its flag in the private sector as well – and its U.S. commercial revenues grew by 93% in Q2.
With a track record this robust, it’s no small wonder that the company leadership is feeling giddy. In the words of CEO Alex Karp “this is still only the beginning of something much larger and, we believe, even more significant.”
While it’s hard to argue with Palantir’s performance, top investor Keithen Drury isn’t so sure that PLTR is a great investment right now.
“Three years from now, I expect Palantir’s stock price to be drastically different than today’s levels. If I’m right, you’re going to want to take action now,” exclaims the 5-star investor, who is among the top 3% of stock pros covered by TipRanks.
The big issue for Drury is the company’s valuation, which has reached “unbelievable levels.” PLTR’s Forward Price-to-Earnings is 279x while its Price-to-Sales comes in at 132x.
To put this into perspective, Drury reminds investors that AI-monster Nvidia has never traded higher than 50x sales or forward earnings.
“The best companies bought for the wrong price can turn out to be lousy investments. I believe Palantir falls into this category,” adds Drury.
Even with continued growth, the investor predicts that its share price will eventually be coming down to “a far more reasonable valuation.”
It’s therefore time to move along to greener pastures, according to the investor.
“There are far more promising AI stocks to buy that are reasonably priced,” sums up Drury. (To watch Drury’s track record, click here)
Wall Street is still on the fence when it comes to Palantir. With 12 Holds – to go along with 5 Buys and 2 Sells – PLTR has a consensus Hold (i.e. Neutral) rating. Its 12-month average price target of $159.47 would translate into losses of ~10%. (See PLTR stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.