Here's What a $10,000 Palantir Investment Could Be Worth by 2028

After a slow start to the year, Palantir (NASDAQ: PLTR) has been on fire lately, igniting talks about how it could someday become a trillion-dollar company. But is that realistic?

Let's take a look at what sparked the rally and see what a $10,000 investment could be worth in a few years.

Image source: Getty Images.

Palantir regained investor confidence with its latest earnings report

First, let's look at where a $10,000 investment would have gotten you if you had begun investing in Palantir's stock at the beginning of the AI arms race. If you had invested $10,000 in the stock at the start of 2023, that figure would now be worth an impressive $272,000.

PLTR data by YCharts

However, that level of performance is practically impossible to maintain. At a $419 billion market cap, if Palantir returned the same 2,600% moving forward, that would price the stock at $11.3 trillion -- more than double the size of the world's largest company. So, if you think that a $10,000 investment in Palantir will make you a millionaire, think again.

But could Palantir do something more reasonable, like double or triple your money? That's far more realistic, so let's see if it's possible.

Palantir's business is growing at a rapid pace because its tools allow users to deploy AI alongside existing systems. Palantir has been in the AI game for a long time, and it has become the go-to software partner for the U.S. government to deploy AI. It also has a growing commercial business, making for a powerful one-two punch.

What ignited the rally in Palantir's stock over the past couple of weeks was a blowout earnings report, in which Palantir delivered 93% year-over-year growth and produced an impressive 55% profit margin. Those figures show that the AI build-out is alive and well, and actually accelerating.

Looking ahead, Wall Street analysts expect 84% growth in Q3 and 75% in Q4. However, Palantir has a very strong and consistent track record of outperforming expectations, so don't be surprised to see Q3's growth rate end up around 90% or so. Next year, though, is where questions arise, as analysts only expect 49% growth.

Is that enough for Palantir's stock to double or triple by 2028?

There is a lot of success priced into Palantir stock

The problem with Palantir isn't its business; the business is doing incredibly. The issue is the stock, which is incredibly expensive.

PLTR PE Ratio data by YCharts

Whether you value the company on trailing earnings, 2026 estimates, or 2027 estimates, the stock is downright pricey. If you think that a company like Palantir should trade at 40 times forward earnings, which is still very expensive, it must nearly double its earnings after 2027's growth is priced into the stock.

That's a lot of optimism for one company, and it will take years for Palantir's stock to grow into its current price tag.

As a result, I think a $10,000 investment in Palantir will be roughly worth $10,000 in 2028 if one thing happens: Wall Street estimates are right. If Palantir can defy expectations and continue growing at a 90% pace over the next two years, I wouldn't be surprised to see Palantir's stock double or triple by 2028. But if the growth slows as Wall Street expects it to, then I think investors will be extremely disappointed in the performance Palantir delivers.

Several AI stocks are growing at a rapid pace that don't have nearly the premium that Palantir does, and I think those stocks are far better buys than Palantir is right now.

Keithen Drury 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.