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Palantir Has ‘Main Character Energy,’ Analysts Say. That Doesn’t Mean Stock Is a Buy.

Sep 22, 2025 12:23:00 -0400 by Mackenzie Tatananni | #Technology #Street Notes

Palantir Technologies has benefited from the sense of “urgency” around AI implementation, according to analysts at D.A. Davidson. (Leon Neal/Getty Images)

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Around one month after a selloff clobbered shares of Palantir Technologies , the data analytics company has yet to lose its reputation as an artificial-intelligence darling.

The high-flying stock has risen nearly 140% this year, bolstered by boundless enthusiasm for the AI trade and hyperscaler capex. Palantir reached an all-time closing high of $186.97 on Aug. 12, after touching a record intraday high of $190 earlier in the session.

But shares slumped days later amid a broad selloff in expensive technology stocks. While Palantir has rebounded some since then, shares remain down 4.2% from their record close, and down 6% from their record intraday high.

Shares fell 1.1% to $180.36 on Monday while peer C3.ai gained 1.8% and the benchmark S&P 500 rose 0.2%.

The stock remains overvalued. As of Friday, it was trading at a forward P/E ratio of 232.65, versus 22.86 for the S&P 500, according to Dow Jones Market Data. And while most analysts don’t recommend buying Palantir, they still see a lot to love.

D.A. Davidson analyst Gil Luria reiterated a Neutral rating on shares in a note Monday. “Even after following Palantir for a decade and covering the stock for almost three years, Palantir’s performance over the last few quarters has made us question everything we know about software,” he wrote.

He meant that in a positive way. The data analytics company gets its strength from its ability to combine disparate data sources without sacrificing security, which in turn “creates an opportunity to radically reduce the time it takes to implement an AI tool,” Luria wrote.

The analyst argued that existing tools from hyperscalers and other analytical data providers fail to shape up. By combining several software products in one and embedding engineers within an organization rather than outsourcing to a third-party vendor, “Palantir can create custom outcome-based pricing that is favored by CFOs,” Luria continued.

The urgency around AI implementation also has been a boon to the stock. Luria argued that this urgency “has also allowed Palantir to access business-line budgets that are free from IT spend constraints.” In simple terms, AI spending seems to have no end in sight, as enterprises scramble to stay neck and neck with competitors.

And then there’s what the firm calls Palantir’s “main character energy.” Luria believes the “brashness,” which could be a reference to outspoken CEO Alex Karp, that may have limited its appeal in the past is becoming its strength. “In a time of uncertainty, customers gravitate to confidence and success,” he wrote.

Part of this confidence “comes from a clear sense of mission that emanates from the government roots,” Luria continued, a nod to Palantir’s reputation as a deeply-entrenched federal contractor. “Turns out there are a lot of people that still believe in protecting Western Civilization. Count us in.”

Last week, Mizuho analysts made the case against buying the stock as they reiterated a Neutral rating and $165 target price.

While Palantir’s recent execution has been “stunning,” with sustained growth across both its government and commercial segments, the stock trades an “extreme” multiple to 2025 and 2026 EV/sales estimates, the Mizuho analysts wrote. With this in mind, shares could see “material multiple reversion” sometime over next few quarters.

Like D.A. Davidson and Mizuho, most firms are on the fence when it comes to Palantir. Of the 29 tracked by FactSet, 18 rate Palantir Technologies at Hold. Seven rate it at Buy or the equivalent, while four rate it at Sell.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com