Veteran analyst sends bold message on Palantir stock target | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Palantir Technologies (PLTR) closed at $143.13 on July 9, just shy of its all-time high of $144.25 hit on June 26.

The stock has been one of the biggest winners of the AI rally, surging 340% in 2024 alone. But with its sky-high valuation, investors are questioning how much higher the stock can go.

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Palantir is known for its AI-driven data analytics software used by the U.S. government, military, and commercial clients, such as Airbus, Merck, and Ferrari. Recent army contracts and the partnership with The Nuclear Company have lifted the stock.

Its strong first-quarter earnings in May and a raised full-year outlook also helped fuel stock momentum. “We are delivering the operating system for the modern enterprise in the era of AI,” CEO Alex Karp said at the time.

Shares of Palantir have gained roughly 90% year-to-date. But there are warning signs behind the surge.

Palantir stock is trading under sky-high valuation.

Image source&colon; Kevin Dietsch/Getty Images

Lofty valuation raises red flags

Despite its growth, Palantir’s valuation has raised eyebrows. The stock currently trades at a trailing price-to-earnings ratio of 607.43, which is about 14 to 15 times higher than peers like Salesforce (CRM) (42.82) and Microsoft (MSFT) (38.38).

Palantir’s earnings quality has also been questioned. “Valuation is absurd,” Sean Williams wrote on The Motley Fool, pointing out that 40% of the company’s pre-tax income last year came from interest on its cash.

Some major investors have started backing away. Billionaire Stanley Druckenmiller sold all his Palantir shares in the first quarter of 2025. Cathie Wood sold about 233,400 shares worth roughly $33 million in June.

Historically, the “next big things”, like the earlier dot-coms, often faced an early bubble-bursting phase. If AI is next, Palantir could be among the hardest hit.

Veteran analyst unveils surprising price target on Palantir stock

Stephen Guilfoyle, a veteran analyst with more than 30 years of NYSE floor trading experience, runs Sarge986 LLC, a family-owned trading operation. He has long followed Palantir, and the stock has surged around 2,074% since he included it in his portfolio.

Although Palantir closed at $143.13 on July 9, it hasn’t yet reached Guilfoyle’s target price. He remains confident in the stock’s long-term potential, especially in the current geopolitical climate.

In a note published on TheStreet Pro on July 8, Guilfoyle described Palantir as “America’s most important defense contractor,” citing its key position in NATO’s increasing defense spending and the lack of serious competition in Europe when it comes to data and analytics.

He also noted the company’s growing success outside the public sector. “The commercial side of what Palantir provides has been growing more quickly than the government side, by a 71% to 45% score,” he wrote in another note on June 24.

“Valuation is absurd,” he conceded. “The threat — and it will come — to Palantir’s valuation will come from competitive pressure, but that day, in my opinion, is not yet upon us.”

On the technical side, Guilfoyle pointed out that a previously bullish pattern has softened, though the stock still trades above key trendlines. He sees a chance for increased institutional interest near the 50-day simple moving average, while a drop below the 200-day average would signal potential downside.

More Palantir

Guilfoyle’s current target price stands at $181, with a pivot at $156. The price target is the highest among Wall Street analysts.

According to TipRanks, analysts’ average price target for Palantir is $108, which implies a 24% downside from the latest close. Price targets range from $40 on the low end to a high of $155.