The ongoing AI revolution is one of the dominant narratives in the financial markets. While we tend to think primarily of Nvidia (NASDAQ: NVDA) as the main beneficiary, there’s one stock that has netted even greater returns from the rally — and that is big data analytics and AI infrastructure company Palantir (NASDAQ: PLTR).
At press time, Palantir stock was changing hands at a price of $75.20 — throughout the course of 2024, the price of a PLTR share has increased by 379.68% — although a slight pullback occurred after a December 24 2024 high.
Wall Street has soured on the stock as of late — with the exception of a couple of notable bulls, most price targets set by analysts now equate to a downside for Palantir stock. To make matters worse, the last quarter of 2024 saw plenty of insider selling, most notably from CEO Alex Karp — potentially signaling a lack of confidence in long-term prospects.
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On the bright side, Palantir has managed to secure a bevy of government contracts — and while its seeming overreliance on the public sector was once seen as a weakness, the big data venture has made great strides in diversifying its revenue streams.
Institutional investors were quite wary of the business for a long time — but after a string of standout earnings calls in 2024, Palantir saw a record influx of institutional capital into the company. With the stock consistently breaching new all-time highs (ATHs), one of the key questions surrounding Palantir stock as we’ve entered 2025 is whether or not it can reach a price of $100.
Palantir stock can reach a price of $100 — but most likely not for long
To reach a price of $100 per share, Palantir stock would have to rally by 32.97% from its price as of press time. Looking at things from that perspective, it appears quite likely that Palantir stock can indeed reach a price of $100 in 2025.
However, the main caveats associated with the data analysis business still apply — barring a very favorable macroeconomic environment and a sustained market-wide bull run, it is very unlikely that those prices can hold for an extended period of time.
To put it simply, a huge amount of growth has already been factored into the price of a PLTR share. The company’s earnings and revenues will only begin to justify current price levels if Palantir can sustain its growth trajectory for years.
That’s a big if — there are likely going to be multiple sharp pullbacks in terms of price — in essence, only investors with a long time horizon and a significant degree of risk tolerance will continue to find the stock appealing — and that simply isn’t enough to sustain such high valuations.
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