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Palantir’s Surge Faces Valuation Scrutiny as Investors Weigh AI Alternatives

Lofty earnings multiples have turned the stock into a test case for AI exuberance.

Overview

  • Palantir shares have delivered gains of roughly 3,000% since early 2023 and pushed the company’s market value to about $450 billion, according to recent coverage.
  • In its most recently reported quarter, revenue rose 48% year over year to above $1 billion as operating margin expanded to 46%.
  • Adoption has accelerated with Palantir’s AIP software, which integrates a large language model for natural‑language interaction.
  • Government business remains a key driver, including a reported $10 billion U.S. Army deal secured this summer.
  • Valuation concerns dominate recent analysis, citing a forward P/E near 292 and a price‑to‑sales ratio above 100, with many analysts at hold or sell and some investors exploring smaller peers like C3.ai at roughly a $2.5 billion market cap.