Palantir (NASDAQ:PLTR) has yet to shake concerns surrounding a potential AI-driven market bubble, especially after its stock skyrocketed more than 150% over the past year. Even after reporting strong Q3 2025 results at the start of November, the shares have been in a downward slide in recent weeks. In total, PLTR has shed 25% of its value since releasing its latest quarterly numbers.
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And yet, there’s no denying that Palantir is in the midst of remarkable momentum. The company delivered 63% year-over-year revenue growth and posted a Rule of 40 score of 114%, a level that sits well above its software peers. Palantir also reported a total contract value (TCV) of $2.8 billion, up 151% from a year ago, underscoring a pipeline that appears well-positioned for continued expansion.
So, is the current dip just a bump on Palantir’s rocketing trajectory toward the stars and an imminent $1 trillion valuation? Top investor Adam Spatacco isn’t so sure.
“While Palantir may one day become a member of the trillion-dollar club, believing that it will become the next AI stock to do so is overly optimistic,” states Spatacco, who is among the top 1% of stock pros covered by TipRanks.
That doesn’t mean that Spatacco is pessimistic about Palantir. Looking at the company’s data analytics capabilities, the investor acknowledges that Palantir is “swiftly becoming the backbone of enterprise AI software protocols.”
Still, the investor is worried about PLTR’s “historically pricey” valuation multiples. Combined with “sky-high” investor expectations, Spatacco predicts that these elevated levels could lead to a selloff if the company’s growth begins to level off.
On that note, Spatacco offers some cautious words: “Where I begin to grow skeptical is the likelihood of Palantir continuing to generate market-beating returns.”
Another worrisome development could come from the institutional investor community, which Spatacco believes could begin to rotate out of Palantir due to the massive run over the past few years.
Summing up, the investor argues that restraint should trump any exuberant predictions of $1 trillion, at least for the time being.
“Ultimately, I remain bullish on Palantir’s long-term prospects but view the stock as overbought right now,” Spatacco concludes. (To watch Spatacco’s track record, click here)
Wall Street is keeping PLTR at arm’s length as well. With 3 Buys, 11 Holds, and 2 Sells, PLTR carries a consensus Hold (i.e. Neutral) rating. However, its 12-month average price target of $187.87 implies a 21% upside from current levels. (See PLTR stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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