Palantir: Losing Momentum – Why 2025 Could Mark A Significant Downturn

Summary:

• Palantir’s valuation is unsustainable, trading at extreme multiples, with a P/S ratio of 64.7x and forward P/E of 203x, far exceeding sector medians.
• Heavy reliance on government contracts, particularly defense, creates revenue instability due to termination provisions and annual renewals, risking significant revenue loss.
• Decelerating growth, massive insider selling, and extreme valuation metrics suggest a significant correction in 2025; I downgrade Palantir to ‘Strong Sell.’

Back in November 2024, I wrote an article titled “Palantir: Take Profits Before It’s Too Late” where I initiated a “Sell” rating for the stock. My primary argument was that Palantir’s (NASDAQ:

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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