Rajiv Jain Defends Tech Underweight Amid Hype Comparison to Dotcom Bubble

GQG Partners founder and CIO Rajiv Jain believes hype around AI stocks is "like the dotcom bubble on steroids". Despite disappointing performance in H1 2025, Jain remains optimistic that his underweight tech stance will ultimately pay off.

Shares of Palantir Technologies (NASDAQ:PLTR) have seen significant fluctuations in 2025, with a notable 113.95% year-to-date gain and a remarkable 1,648.59% rise since its October 2022 IPO [1]. The stock's performance has been driven by substantial earnings growth and high-profile contracts, but it also faces scrutiny due to its valuation and market multiple.

Palantir reported a 48% year-over-year revenue increase, with U.S. government revenues rising by 53% to $426 million, and beat earnings expectations by 16 cents per share [1]. The company's forward P/E ratio of 256.50, however, raises concerns about its valuation. Despite this, analysts like Mizuho upgraded Palantir to "Neutral" from "Underperform" with a price target of $135, highlighting the company's recent momentum [1].

The AI market's growth potential is a significant driver for Palantir. According to Grand View Research, the AI market is expected to reach $1.811 trillion by 2030, with a 35.9% compound annual growth rate (CAGR) [1]. Palantir's focus on broad AI applications in diverse industries positions it well to capitalize on this growth.

Palantir's commercial segment has also seen substantial growth, with its Artificial Intelligence Platform (AIP) empowering enterprises in healthcare, finance, and manufacturing. The company's software-as-a-service model supports scalability and profitability, with a 69% increase in customer count to 593 [1].

Despite the hype, some investors remain cautious. GQG Partners founder and CIO Rajiv Jain believes the hype around AI stocks is "like the dotcom bubble on steroids" [2]. While Palantir's performance in the first half of 2025 was disappointing, Jain remains optimistic about his underweight tech stance. The stock's valuation and market multiple, along with the potential for competition and decreasing AI costs, suggest a need for caution.

Wall Street analysts are divided on Palantir. The 20 analysts covering PLTR assign it a consensus "Hold" rating, with a vast spread of price targets ranging from $40.00 to $200.00 [1]. 24/7 Wall St.'s 12-month price target for Palantir is $107, representing potential downside of 33.48% from today's stock price [1].

In conclusion, while Palantir Technologies has shown strong growth and potential, investors should approach the stock with caution due to its high valuation and market multiple. The AI market's growth potential and Palantir's focus on broad AI applications make it an attractive investment, but the stock's performance in 2025 and the potential for competition and decreasing AI costs suggest a need for a balanced perspective.

References:
[1] https://247wallst.com/investing/2025/08/27/palantir-technologies-nasdaq-pltr-stock-price-prediction-for-2025-where-will-it-be-in-1-year/
[2] https://theoutpost.ai/news-story/ai-investment-strategies-insights-from-general-catalyst-and-sentinel-global-19536/