Palantir Bounced Back From Sell-Offs Today -- Is the Stock a Buy Right Now?

Palantir Technologies (NASDAQ: PLTR) stock ended Wednesday's trading in the green despite opening with a substantial valuation pullback. The company's share price wound up climbing 2% in the day's trading, but it had been down as much as 4.8% earlier in the session.

Palantir saw sell-offs along with the broader market to start today's trading as investors reacted to first-quarter gross domestic product (GDP) data from the U.S. Commerce Department. While economists had forecast growth of 0.4%, GDP unexpectedly contracted 0.3% annually in the period.

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The decline for GDP stemmed from a large increase in imports ahead of new tariffs implemented by the Trump administration, which should be a one-time event, but investors also reacted negatively to growth of 1.8% for consumer expenditures, falling well short of the 4% growth recorded in the prior-year quarter.

But the market's substantial early sell-offs were erased by the end of the day thanks to a social media post associated with a state-run Chinese channel that said U.S. officials were reaching out for tariff negotiations.

With today's gains, Palantir stock is now up 56.5% this year.

Is Palantir stock a buy right now?

Following a continued valuation run-up in 2025, Palantir is now trading at roughly 214 times this year's expected earnings and 74 times expected sales. At these incredibly high forward valuation multiples, the stock looks pretty much untouchable for investors without very high levels of risk tolerance.

The bull case for Palantir basically hinges on the thesis that the company has built a foundation-level role in the artificial intelligence (AI) software revolution -- and that it's still in the early stages of benefiting from strong competitive advantages, prescient strategic positioning, and secular demand tailwinds. To Palantir's credit, the company has been absolutely knocking it out of the park -- and its approach to AI software seemingly has the business poised to continue racking up wins down the stretch.

For long-term investors willing to take on big risk in order to get a piece of a growth play that still has explosive potential, I think Palantir has promise even though it trades at very rich valuation multiples. But with expectations running high heading into the company's first-quarter report on May 5, even risk-tolerant investors may want to dollar-cost average into the stock rather than buy in all at once.

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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.