For three consecutive years, Palantir’s stock has recorded yearly rises in the triple digits.
According to traditional valuation metrics, Palantir Technologies’ stock is infamously pricey. However, the newest bull on Wall Street claims that owning the stock is worth paying more.
Arvind Ramnani, an analyst at Truist Securities, praised the company’s distinctive financial profile and began covering the stock on Tuesday with a buy rating. After examining 111 software businesses, he concluded that Palantir (PLTR) had the highest margins and one of the top three growth rates.
According to him, that profile supports a forward price-to-sales ratio of at least 70.
Thanks to developments in artificial intelligence, Palantir’s company has expanded and grown over time. Although the company is most recognized for its defense-tech products, it also makes it possible for businesses to employ AI more broadly as they seek to do more with their data and expedite repetitive procedures.
Ramnani commended the business for its “ideal competitive position” in assisting clients in “adopting AI capabilities and leverage their proprietary data in a secure environment.” AT&T (T), Wendy’s (WEN), BP (BP), and Walgreens are among the clients, indicating a scope that extends well beyond defensive technology.
In comparison to mid-2023, Palantir’s revenue growth rates have significantly increased due to the company’s AI momentum, and Ramnani believes there is still potential for the business to grow both with its current clientele and with new ones.
Palantir controlled an estimated 0.9% of the company’s $119 billion total addressable market at the time of its 2020 direct offering. According to Ramnani, the market opportunity has now almost tripled, with Palantir’s penetration estimated at 1.3%.
Additionally, financials have improved. According to Ramnani, the company now has a free-cash-flow margin of more than 40%, which would enable it to “significantly increase capital returns over the long time,” most likely through buybacks that might partially counteract the dilution caused by stock-based compensation.
Palantir’s stock is slightly higher in premarket trading on Monday. They have just finished their third consecutive year of triple-digit gains, having increased by 135% in 2025.
