Why Palantir Stock Just Popped
Key Points
Palantir stock costs a lot, is growing quickly -- and down 23%.
Wedbush analyst Dan Ives thinks government spending can save Palantir stock from further declines.
- 10 stocks we like better than Palantir Technologies ›
Palantir Technologies (NASDAQ: PLTR) stock jumped 5% through 9:45 a.m. ET Monday after Wedbush analyst Dan Ives reiterated that he still has an outperform rating on the government IT contractor, and still believes the stock will hit $230 within a year.
From its current stock price, that would work out to a 45% profit.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Image source: Getty Images.
Why Wedbush loves Palantir
Palantir provides IT services, focusing on artificial intelligence, to a host of government agencies, including the Department of Defense, the National Institutes of Health, and the Centers for Disease Control and Prevention, as well as international defense ministries, healthcare systems, and law enforcement organizations. Ives's optimism about Palantir boils down to a general view of the company's ability to win even more contracts "across the federal government."
More than just growing its business in tandem with government budget growth, though, Ives argues that Palantir is attaching itself specifically to the government's highest-priority projects so it can enjoy accelerated growth in the best-funded programs.
Is Palantir growing fast enough?
The stock has slumped amid growing investor concerns about the health of the AI industry. Its stock price is down more than 23% since hitting an all-time high in early November -- yet Palantir shares are still up 56% over the past 52 weeks. Ives is betting Palantir can shake off these worries and climb past its recent high.
I'm not so sure about that.
While its powerful growth is not in question -- analysts polled by S&P Global Market Intelligence see the company growing earnings 47% per year over the next five years -- the stock remains richly priced. Valued at $360 billion in market capitalization, Palantir costs 239 times trailing earnings.
Even down 23%, Palantir stock may not be done falling yet.
Should you buy stock 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 $495,179!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,058,743!*
Now, it’s worth noting Stock Advisor’s total average return is 898% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of March 23, 2026.
Rich Smith 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.
Recommended Articles
