Palantir Technologies (NASDAQ:PLTR) has taken the investing world by storm, and its share price has risen by over 2,000% during the past three years.
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Palantir seems to be standing at the forefront of the emerging AI revolution, with a slew of high-profile clients from both government and industry.
The company’s Q2 2025 earnings report provided fresh fodder for PLTR bulls, with revenues surging by 48% year-over-year. No longer just catering to the U.S. security sector, Palantir grew U.S. commercial revenues by 93% year-over-year in the last quarter.
Palantir is guiding for additional growth, with CEO Alex Karp predicting that Q3 2025 will reflect the highest sequential quarterly revenue increase in the company’s history.
Does this mean that PLTR’s continued ascent is a foregone conclusion? Though he readily acknowledges Palantir’s incredible journey thus far, top investor Will Healy isn’t feeling so confident about what the future holds.
“Although anything can happen with Palantir stock over the next three years, its prospects for beating the market during that time frame are doubtful,” predicts the 5-star investor, who is among the top 3% of stock pros covered by TipRanks.
Healy notes that the company’s valuations are through the roof, with its Price-to-Earnings ratio approaching 600x.
“The valuation metrics show how far removed Palantir has become from its fundamentals,” the investor adds.
That doesn’t leave much of a cushion for investors, explains Healy. For instance, even if the company doubled its profits over the next three years while its share price remained static, its Price-to-Earnings ratio would still be close to 75x.
Moreover, Healy cautions that these metrics are setting PLTR up for disappointment, as even “objectively solid results” might not be enough to prevent its share price from sliding downward.
For this investor, this configuration makes Palantir too risky to approach in the near term, and maybe even for the next few years.
“With the valuation arguably in ‘bubble’ territory, other stocks offer a more likely path to market-beating gains over the next three years,” sums up Healy. (To watch Will Healy’s track record, click here)
Wall Street is also taking a cautious approach when it comes to PLTR. With 13 Holds far outpacing 4 Buys and 2 Sells, PLTR carries a consensus Hold (i.e. Neutral) rating. Its 12-month average price target of $157.65 implies losses of ~13% in the year ahead. (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.