Why Palantir Stock Is Skyrocketing Today

Key Points

• Palantir smashed expectations in Q2, handily beating Wall Street's top- and bottom-line forecasts.

• CEO Alex Karp sees this as an "efficient revolution" and believes there is a whole lot of growth still to come.

• Valuation remains a major red flag for long-term investors, with a forward P/E of nearly 280.

• 10 stocks we like better than Palantir Technologies ›

Shares of Palantir (NASDAQ: PLTR) are flying on Tuesday, up 8.7% as of 10:05 a.m. ET. The jump comes as the S&P 500 gained 0.1% and the Nasdaq Composite rose 0.3%.

Palantir reported another blowout quarter, handily beating Wall Street's already high expectations for the artificial intelligence (AI) powerhouse.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Palantir sales top $1 billion for the first time

Palantir's Q2 earnings showed the company is continuing to fire on all cylinders and delivered, for the first time ever, sales of over $1 billion. The company reported adjusted earnings per share (EPS) of $0.16 on $1 billion in sales versus the consensus $0.14 per share on $940 million in sales.

CEO Alex Karp praised his company's performance and spoke of his vision for the future, calling it an "efficient revolution" and saying that his "goal is to get 10x revenue and have 3,600 people. We now have 4,100 [people]."

Image source: Getty Images.

The company also lifted its guidance for the full year from between $3.89 billion and $3.9 billion to between $4.142 billion and $4.15 billion.

Why Palantir stock's valuation still looks risky

The company's incredible and efficient growth is undeniable, but I continue to have serious doubts about its long-term prospects. Its trailing price-to-earnings ratio (P/E) is nearly 700, an astronomical figure. Its forward P/E is nearly 280. Tesla -- which I also think is severely overpriced -- is the only other top-20 stock that trades with a forward P/E over 100.

The company would have to achieve near perfection for many years to justify this sort of multiple. I'm not sure it can, despite the optimism of its CEO. I would stay away from Palantir stock.

Should you invest $1,000 in Palantir Technologies right now?

Before you buy stock in Palantir Technologies, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palantir Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $631,505!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,103,313!*

Now, it’s worth noting Stock Advisor’s total average return is 1,039% — a market-crushing outperformance compared to 181% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 4, 2025

Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies and Tesla. The Motley Fool has a disclosure policy.