Palantir (PLTR) Defies Skeptics—Surges 62% to Dominate Nasdaq-100 in 2025

Big data’s black box just became Wall Street’s golden child—for now. Palantir’s stock rockets past analyst forecasts, leaving even the most bullish traders scrambling to update their spreadsheets.

How? By doing what Palantir does best: turning government contracts and corporate paranoia into recurring revenue. The usual suspects—defense, healthcare, and ’strategic partnerships’—fueled the rally. Meanwhile, short sellers got steamrolled by the AI hype train.

Funny how ’ethical AI’ concerns vanish when the stock chart looks like a crypto bull run. Just don’t ask about profitability—some miracles take longer than others.

TLDR

• Palantir stock surged 62% year-to-date in 2025, making it the top performer on the Nasdaq-100 index
• The company hit an all-time high of $130 per share in May before retreating slightly
• Q1 2025 revenue jumped 39% to $884 million, marking the seventh consecutive quarter of acceleration
• Palantir secured a $795 million U.S. Army contract for Maven Smart System, pushing total Maven value to $1.3 billion
• Stock trades at extremely high valuations with P/E ratio of 265 times adjusted earnings

Palantir Technologies has emerged as the standout winner on the Nasdaq-100 this year. The data analytics company’s stock price rocketed 62% year-to-date through May 27, 2025.

The stock reached its all-time peak of $130 per share on May 14. Since then, shares have pulled back modestly but remain well above previous highs.

This performance puts Palantir at the top of the Nasdaq-100 leaderboard for 2025. The company has capitalized on growing demand for artificial intelligence solutions across government and commercial sectors.

Palantir develops data analytics software through its primary platforms Gotham and Foundry. These tools help clients integrate information and train machine learning models. The company’s newer Artificial Intelligence Platform (AIP) serves as a large language model orchestration tool.

The company’s software architecture centers on an ontology-based framework. This system defines relationships between digital information and physical assets like factories and equipment.

Strong Financial Performance Drives Growth

Palantir delivered impressive first-quarter results that exceeded analyst expectations. Revenue climbed 39% year-over-year to $884 million, topping forecasts by nearly $22 million.

$PLTR Palantir Q1 FY25:

• Customers +39% Y/Y to 769.
• Net dollar retention 124% (+13pp Y/Y).
• Revenue +39% Y/Y to $884M ($22M beat).
• Non-GAAP EPS $0.13 (in-line).

FY25 guidance:
• Revenue +36% Y/Y to ~$3.9B ($147M raise).
• Adj. operating margin 44% (+5pp Y/Y). pic.twitter.com/u46vCAgoW1

— App Economy Insights (@EconomyApp) May 5, 2025

This marked the seventh consecutive quarter of revenue acceleration. U.S. commercial sales led the growth with a 71% jump to $255 million.

U.S. government revenue also showed strength, rising 45% to $373 million. Non-GAAP net income increased 62% to $0.13 per diluted share.

The company has beaten earnings estimates for seven straight quarters. On average, Palantir has exceeded consensus estimates by 10%.

Management raised full-year revenue guidance following the strong quarter. The company now projects revenue growth of 36% for 2025, with total revenue reaching as high as $3.9 billion.

Major Government Contracts Fuel Momentum

Defense contracts continue to drive Palantir’s government segment growth. The U.S. Army recently awarded the company a $795 million contract for the Maven Smart System.

This AI-powered tool handles data analysis and target tracking for military operations. The new contract brings Palantir’s total Maven work to approximately $1.3 billion, marking its first billion-dollar contract milestone.

The company also secured a new agreement to support NATO’s artificial intelligence initiatives. These deals strengthen Palantir’s position in global defense systems.

Forrester Research recently named Palantir a leader in AI and machine learning platforms. The research firm forecasts this market will grow 40% annually to reach $153 billion by 2028.

Valuation Concerns Mount

Despite strong fundamentals, Palantir’s valuation metrics raise red flags among analysts. The stock currently trades at 265 times adjusted earnings, well above typical software company multiples.

The price-to-sales ratio reached over 100 times in both February and May 2025. Historical analysis shows only six other software stocks achieved similar valuations in the past 20 years.

Those companies experienced average declines of 81% from their peaks. The list includes Bill Holdings, Cloudflare, SentinelOne, Snowflake, SoundHound AI, and Zoom Communications.

If Palantir follows this historical pattern, shares could fall to around $23.67 from their February peak of $124.62. This WOULD represent similar downside from current price levels.

Wall Street analysts maintain mixed views on the stock. The consensus rating stands at Hold based on three Buy ratings, eleven Hold ratings, and four Sell ratings.

The average price target sits at $100.13, implying 18% downside from recent trading levels. Analysts acknowledge the company’s strong growth prospects while expressing caution about extreme valuations.

Wedbush analyst Daniel Ives highlighted Palantir’s expanding role in federal AI spending. He expects the company to benefit from increased government AI investments across North America and Europe.

Morningstar analyst Mike Giarelli previously called Palantir “the next software juggernaut.” However, even bullish analysts warn about the sustainability of current valuation levels.

The company secured the $795 million Army contract for Maven Smart System in May 2025, bringing total Maven contract value to $1.3 billion and representing Palantir’s first billion-dollar contract milestone.