Palantir (PLTR) Stock: AI Powerhouse or Bubble Ready to Burst?

By: María Fernández Published On: 19/08/2025

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Palantir Technologies (NASDAQ: PLTR) has been a market darling, delivering monster returns for investors. The AI leader has more than doubled this year, adding to a stunning 340% gain in the previous year. But is this growth sustainable, or is Palantir stock in bubble territory?

Palantir's Rise to AI Dominance

Palantir initially made its mark providing advanced data analytics to U.S. intelligence agencies after 9/11. It has since expanded its reach into the commercial sector with its Artificial Intelligence Platform (AIP). AIP collects data from various sources, organizes it, and connects it to real-world processes, enabling AI models to solve complex problems. This has led to accelerating revenue growth, with U.S. commercial revenue jumping 93% year-over-year.

Strong Financial Performance

Palantir recently surpassed $1 billion in quarterly revenue for the first time, and the company is projecting continued growth. They raised their Q3 revenue guidance to $1.087 billion, representing a 50% year-over-year increase. New clients are consistently joining, and management has been raising its outlook. The company's expanding suite of AI tools is clearly resonating with businesses.

Valuation Concerns

Despite the impressive performance, concerns remain about Palantir's valuation. Top investor Julian Lin warns that the stock's valuation is in bubble territory, exceeding historical tech bubbles. He points to Cisco, which traded at 30x sales before crashing during the 2000 stock bubble, while Palantir recently traded as high as 100x sales.

Key Takeaways

Palantir is experiencing rapid revenue growth driven by its AI platform.
The company is expanding beyond government contracts into the commercial sector.
However, the stock's high valuation raises concerns about a potential bubble.

Investors should carefully consider Palantir's growth prospects and valuation before making any investment decisions. While the company has enormous potential, history suggests that valuations eventually matter.