Palantir Technologies (PLTR) has entered the top 10 U.S. tech companies by market cap, surpassing Salesforce (CRM) to claim the tenth spot. According to a CNBC report, the data analytics is now valued at $281 billion by market cap after shares jumped 8% last week, continuing a remarkable rally that has seen the stock more than quintuple over the past year.

Founded in 2003 by Peter Thiel and CEO Alex Karp, Palantir has defied the broader tech market downturn, with shares climbing 70.7% in 2025 while the Nasdaq Composite ($NASX) is down 1.5%. The company's growth has been fueled by its booming government business, which grew 45% to $373 million last quarter, including a $178 million U.S. Army contract for artificial intelligence (AI)-enabled systems.

Investors are paying premium prices for Palantir stock, which trades at 520 times trailing earnings and 90 times revenue, significantly higher than other top tech companies. Let’s see if you should buy PLTR stock at the current valuation. 

Is Palantir Stock a Good Buy Right Now?

Palantir Technologies posted solid results in Q1 of 2025, showcasing robust growth across all segments. Total revenue reached $884 million, up 39% year-over-year, primarily driven by strong performance in the U.S. market.

Revenue for Palantir’s U.S. commercial business grew by 71% year-over-year and 19% quarter-over-quarter to $255 million. U.S. government revenue performed admirably, growing 45% year-over-year to $373 million. Overall U.S. revenue climbed 55% year-over-year to $628 million, underscoring Palantir's strength in its home market.

Contract values showed impressive momentum, with the total value of U.S. commercial contracts reaching $810 million, a 183% increase from the previous year. The value of U.S. commercial remaining deals grew 127% year-over-year to $2.3 billion, indicating healthy future revenue potential.

Palantir's profitability metrics were equally impressive. It reported adjusted operating income of $391 million with a 44% margin, and adjusted free cash flow of $370 million (42% margin). The Rule of 40 score, which is the sum of revenue growth rate and adjusted operating margin, reached 83%, demonstrating exceptional financial health.

Palantir continued to expand its customer base, with U.S. commercial customers increasing 65% year-over-year to 432. During Q1, Palantir closed 139 deals of at least $1 million, including 51 deals worth $5+ million and 31 deals exceeding $10 million.

Highlighting its technological leadership, Palantir showcased several key innovations and partnerships during the quarter. Its TITAN program was ranked among the top-performing programs by U.S. Army leaders, while the Maven Smart System is being deployed to enhance NATO operations. The company also unveiled new enterprise automation solutions at DevCon 2 and reported strong adoption of its Artificial Intelligence Platform (AIP).

Palantir expects Q2 revenue of $936 million at the midpoint estimates, while full-year sales are forecast at $3.9 billion. Moreover, U.S. commercial revenue is projected to exceed $1.178 billion (68% growth). The company ended Q1 with $5.4 billion in cash and no debt, positioning it strongly for continued investment and expansion.

What's the Target Price for PLTR Stock?

While Palantir continues to grow at an impressive pace, investors and analysts are wary of the tech stock's lofty valuation. Palantir is forecast to grow adjusted earnings from $0.41 per share in 2024 to $2.04 per share in 2029, indicating a compounded annual growth rate of almost 38%. 

However, out of the 20 analysts covering PLTR stock, the consensus is a tepid “Hold,” and the average target price for PLTR stock is $91.11, about 30% below the current trading price.