Is Palantir Stock Going to $200? Here's What the Data Says

The artificial intelligence decision-making company Palantir Technologies (NASDAQ: PLTR) has been one of the best stocks to own in one of the market's best sectors in recent years. The stock is up over 62% in the past year and nearly 600% over the past five. Since going public in 2020, the stock has returned nearly 1,590%.

Leveraging artificial intelligence (AI), Palantir enables organizations and companies to gather, segment, build, and analyze datasets like never before. Many government departments use the technology to gather data from multiple unrelated sources and gain insights that lead to actual decisions, as well as information about the implications of those decisions.

Image source: Getty Images.

Businesses can use the technology to become more efficient and drive profitability. Even better, people do not need experience working with large language models to use Palantir's products, making it very user-friendly.

Trading around $156 per share (as of March 25), could Palantir hit $200 per share? Here's what the data says.

Looking at the valuation and earnings trajectory

As detailed in the chart below, here are Palantir's average trailing and forward price-to-earnings (P/E) ratios over the past two years.

Data by YCharts.

Both are below average right now, as AI sentiment has soured more recently. Currently, Wall Street analysts expect Palantir to generate earnings per share of $1.32 in 2026 and $1.87 in 2027.

If this comes to fruition and Palantir holds its current multiples, it would easily clear $200 per share. A roughly 117 forward (P/E) on $1.87 of EPS equals a roughly $219 stock price. Meanwhile, a trailing P/E of 246 would imply a stock price of $460. So, based on historic data, Palantir's stock going to $200 is more than possible.

However, investors should keep in mind that the law of numbers tends to slow growth over time, regardless of how great a company is, so it's entirely possible that multiples continue to compress. It is also rare to see companies trade at such elevated multiples. The stock also has high retail interest, making some of its trading and multiples potentially meme-inspired.

Now, Wall Street analysts, on average, actually have price targets that imply 25% upside, according to TipRanks. That would get the stock into the low $190s. So in the near term, I definitely think Palantir can hit $200, and the valuation data supports that.

However, in the long term, I would caution investors against piling into this stock at this extraordinary valuation. That's because the risk/reward is not in your favor. Sure, if the bull thesis works out, the stock could rise to $200 or above, but if it doesn't, your downside could be severe.

Bram Berkowitz 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.