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Palantir Technologies stock has delivered extraordinary gains since the company’s public offering in September 2020, with shares up nearly 1,700% over that period. The question for investors is whether the company can sustain a similar level of performance over the next five years.
Palantir is no longer in the red and is moving further into profitability. Last year’s per-share profit of $0.63 is projected to triple by 2027, and then grow another 40% the following year as the company reaches additional scale. Revenue also accelerated, rising 56% last year to $4.4 billion, with expectations that sales will exceed $10 billion the year after next.
The broader market backdrop is also supportive. Precedence Research expects the decision intelligence market in which Palantir operates to grow by more than 15% per year through 2035.
Despite the growth narrative, the stock’s valuation is a major challenge. Palantir’s trailing-12-month price-to-earnings ratio is about 180, compared with the S&P 500’s trailing P/E of less than 25. Even if Palantir reports the expected $2.56 per share for 2028, the shares would still be priced at more than 50 times that figure, leaving limited room for substantial upside.
Beyond valuation, competition is another risk that the article highlights. There are few barriers to entry into the decision-intelligence market, particularly for large technology firms such as Microsoft or Alphabet, which already have the technical resources to pursue the space.
The article also notes that if quantum computing becomes integrated into decision-intelligence platforms, Alphabet and Microsoft would be positioned to participate. With a large opportunity available, it argues that another company is likely to compete effectively with Palantir.
Increased competition can reduce pricing power and pressure profit margins—an issue Palantir has not yet faced to the same extent.
While the article does not suggest Palantir is doomed, it argues that investors should temper expectations for a repeat of the early surge. Even so, it frames Palantir as a stronger growth option than many alternatives, provided expectations are aligned with a more mature phase of the company’s evolution.
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