Palantir Shows Strong Growth, But High Valuation Raises Caution for Investors
Nov 17, 2025
Palantir Technologies has shown impressive growth, reporting a 63% increase in revenue year-over-year in the most recent quarter. U.S. commercial revenue more than doubled, rising by 121%. The company has been expanding its business both with government clients and in the commercial sector, boosted by demand for its artificial intelligence (AI) capabilities.
Palantir’s profit margins are among the highest in the industry, and management has expressed optimism about the company’s future. However, the stock’s price-to-earnings (P/E) ratio is over 400, which is much higher than most other technology companies. This suggests that the stock is very expensive compared to the company’s current earnings.
Recently, Palantir's stock price has experienced declines, dropping by over 5% last week after a prior week of declines as well. Despite strong business performance, the high valuation makes the stock a risky investment.
Why is Palantir's stock considered expensive?
Palantir has a very high price-to-earnings (P/E) ratio, meaning investors are paying a lot for each dollar of earnings, which increases investment risk.
What is driving Palantir's growth?
Palantir’s growth is fueled by strong demand for its AI technology in both government and commercial markets, especially in the United States.
Is Palantir a safe investment?
While the company has strong growth and profits, its high stock price compared to earnings makes it risky, especially if future growth slows.
Sources
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