Palantir Stock Crashes After Earnings but It Could Still Soar 300%, According to a Wall Street Analyst

Certain analysts share that opinion. Forrester Research recently recognized Palantir as a technology leader in artificial intelligence and machine learning platforms, awarding AIP better scores than similar products from Alphabet‘s Google and Microsoft. “Palantir is quietly becoming one of the largest players in this market,” wrote lead analyst Mike Gualtieri.

Dan Ives at Wedbush believes that advantage positions Palantir as a major beneficiary of the AI revolution. “Look, I believe this is going to a trillion-dollar market cap in the next two to three years,” he told CNBC after the company’s first-quarter financial report. That forecast implies 300% upside from its current market value of $250 billion.

However, most Wall Street analysts are far less optimistic. The consensus estimate says Palantir’s adjusted earnings will increase at 26% annually through 2026. That makes the current valuation of 230 times earnings look absurdly expensive. Not surprisingly, most analysts see the stock as overvalued despite its post-earnings decline. The median target price of $98 per share implies 8% downside from its current share price of $107.

Personally, I think Ives is correct in predicting Palantir will eventually be a trillion-dollar company. But I also believe the stock is wildly overvalued at its current price-to-earnings multiple. So, patient investors can buy a small position today, provided they plan to hold the stock for several years and are comfortable with the idea of a sharp decline.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Trevor Jennewine has positions in Palantir Technologies. The Motley Fool has positions in and recommends Alphabet, Microsoft, and Palantir Technologies. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Palantir Stock Crashes After Earnings but It Could Still Soar 300%, According to a Wall Street Analyst was originally published by The Motley Fool