Is It Too Late to Buy Palantir Stock?
Key Points
Palantir trades at hugely growth-dependent valuation multiples.
The company has been posting very strong margins and sales growth.
Palantir's apparent competitive advantages and business momentum suggest its valuation can continue to rise.
- 10 stocks we like better than Palantir Technologies ›
Even after some big valuation pullbacks in 2026, Palantir Technologies (NASDAQ: PLTR) stock has been one of the tech sector's biggest winners over the past five years. The company's leading positions in artificial intelligence (AI) and analytics services have translated into strong sales and earnings growth, powering explosive gains for the stock.
Over the past five years, Palantir stock has climbed 555% -- a performance that trounces the S&P 500's total return of roughly 74% and the Nasdaq Composite's total return of 67%. That's a lot of share price growth in a relatively short time. Are Palantir stock's best days behind it, or can investors still score big wins with this AI leader?
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Palantir continues to be a high-risk, high-reward play
Trading at roughly 108 times this year's expected earnings and 47 times expected sales, Palantir has an extremely growth-dependent valuation profile. Based on the company's price-to-earnings and price-to-sales multiples, the company is arguably the most expensive stock in the S&P 500.
On the other hand, Palantir has been posting fantastic margins and recording fantastic sales growth that has actually been accelerating. The business posted a net-income margin of 43% and delivered year-over-year sales growth of 70%. Crucially, the company's category-leading AI software and analytics suite has a long runway for continued sales expansion amid what looks to be a very promising demand outlook for high-performance artificial intelligence services.
While Palantir's roughly $364 billion market capitalization already prices in strong growth for the business, it also leaves the door open for long-term investors to see very strong returns. The company's valuation profile suggests the stock could take a big hit if it delivers an underwhelming quarterly report or faces macroeconomic headwinds, but I don't think it's too late to buy Palantir stock.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.
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