Valued at a market cap of $272 billion, Palantir (PLTR) stock has surged over 1,000% since its initial public offering in late 2020. However, Jim Cramer recently identified Palantir Technologies as “the number one meme stock of all time,” suggesting CEO Alex Karp “whips people into a frenzy.”

Despite President Donald Trump’s tariffs negatively affecting markets, defense software stocks like Palantir are performing well. Moreover, Trump has shown a willingness to negotiate with China regarding tariffs and indicated that he won’t fire Federal Reserve Chair Jerome Powell, which provides some stability. 

So, let’s see if you should buy, sell, or hold PLTR stock right now. 

What Do Analysts Expect From Palantir in Q1 2025?

Palantir is scheduled to report its first-quarter earnings on Monday, May 5. Wall Street expects the company to report revenue of $862 million with adjusted earnings per share of $0.13. While sales are forecast to rise by 36% year-over-year, earnings growth is estimated to be more than 50%. 

Palantir has surpassed Wall Street revenue and earnings estimates in each of the last five quarters. Moreover, PLTR stock surged by more than 23% in a single trading session, following its previous two quarterly earnings reports. 

In Q4 2024, Palantir grew its sales by 36% year over year to $828 million, significantly exceeding its guidance. The AI-powered data analytics company highlighted its Artificial Intelligence Platform (AIP) as the primary driver behind this acceleration, particularly in the U.S. market.

Palantir’s U.S. business grew by 52% year-over-year, with U.S. commercial revenue surging 64% to $214 million. Its U.S. government segment also showed impressive growth at 45% year-over-year. 

For the full year 2024, Palantir reported 29% revenue growth to $2.87 billion. It provided 2025 revenue guidance of approximately $3.75 billion, indicating a year-over-year increase of 31%, with U.S. commercial revenue expected to grow at least 54%.

Profitability metrics were equally impressive, with adjusted operating margin reaching a record 45% in Q4. It generated $517 million in adjusted free cash flow during the quarter, representing a 63% margin.

Palantir executives emphasized their “ontology” technology as a key differentiator, describing it as an essential intermediate layer that makes enterprise systems accessible to AI in a governed, secure manner. This approach has enabled customers to achieve dramatic workflow improvements, with examples cited of processes being reduced from days to minutes.

The company is also focusing on its “Warp Speed” initiative for U.S. manufacturing and its FedStart offering for government clients, which recently achieved FedRAMP High certification.

Management attributed the company’s accelerating growth to the rapid adoption of AI in production environments, particularly in the U.S., while noting significantly slower adoption in Europe. 

Is PLTR Stock Overvalued?

The growth story for Palantir stock is far from over, as analysts expect sales to rise from $2.86 billion in 2024 to $11.3 billion by 2029. Moreover, earnings are forecast to expand from $0.41 per share in 2024 to $1.91 per share in 2029. 

Similar to other tech companies, Palantir is asset-light and will benefit from operating leverage. The company is forecast to improve its net margins from 35% to over 41% in the next five years. Moreover, its free cash flow margins are also projected to improve from 40% in 2024 to 51.4% in 2029. 

Today, PLTR stock trades at a forward price-to-earnings multiple of 210x, higher than the average multiple of 100x since it was listed on the Nasdaq Exchange. If PLTR stock is priced at 100 times forward earnings, it will trade around $191 in early 2029, significantly higher than its current price. 

Out of the 20 analysts covering Palantir stock, three recommend “Strong Buy,” 12 recommend “Hold,” one recommends “Moderate Sell,” and four recommend “Strong Sell.” The average target price for PLTR stock is $84, indicating downside potential of over 25% from current levels.