Palantir Sank Today -- Is the Stock a Buy Right Now?

Palantir (NASDAQ: PLTR) stock got hit with another round of sell-offs in Tuesday's trading. The company's share price closed out the day's trading down 4% and had been off as much as 6.2% earlier in the session.

Palantir's valuation pulled back today in conjunction with new bearish coverage from Jeffries. Brent Thill, the investment firm's lead analyst on the stock, published new coverage on Palantir this morning and maintained an underperform rating on the stock and a one-year price target of $60 per share. Based on Tuesday's closing price of $83.89 per share, Thill's target suggests additional downside of 28.5%.

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

While Thill sang the praises of Palantir's Artificial Intelligence Platform (AIP) after a recent conference showcasing the service, the Jeffries analyst raised concerns about the software specialist's valuation profile. Despite Palantir stock having pulled back 33% from its high, the company is still valued at roughly 150 times this year's expected earnings and 52 times expected sales. No matter how you slice it, that's a highly growth-dependent valuation.

Is Palantir stock a buy right now?

Palantir's heavily forward-looking valuation means the stock is probably not a good fit for investors without high risk tolerance. Some very strong sales and earnings growth is already priced into the stock, and shares could see a big pullback if business expansion comes in lower than anticipated or the macroeconomic backdrop takes a turn for the worse.

On the other hand, Palantir looks to have built a clear leadership position in artificial intelligence (AI) software services for both public and private sector customers. The company's existing strengths are already helping it deliver fantastic sales growth and improved margins, and wins early in the AI race could build the foundations for massive success over the long term. So while Palantir is a risky stock, I think it will deliver strong returns for investors who take a buy-and-hold approach at today's prices.

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 Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $732,610!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. 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 March 18, 2025

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.