Palantir Rises to 9th in Trading Volume as High Valuations Spark Earnings Scrutiny

Palantir Technologies (PLTR) closed July 30 with a 1.52% gain, trading at a daily volume of $6.37 billion, ranking ninth in market activity. The stock is poised to report Q2 2025 earnings on August 4, with analysts forecasting $0.14 per share and $938.3 million in revenue, reflecting 55.6% and 38.4% year-over-year growth, respectively. While the company has historically exceeded estimates in three of the last four quarters, current models suggest a lower probability of an earnings beat, citing a Zacks Rank #5 rating and a muted Earnings ESP of 0.72%.

Analysts highlight robust growth in both government and commercial segments, with projected revenue increases of 37.7% and 39.7%, driven by expanding client bases. However, PLTR’s valuation metrics remain a concern. Shares trade at 2,103.6x trailing EV/EBITDA and 234.86x forward P/E, far exceeding industry averages of 15.29x and 40.36x. Despite strong AI-driven demand, the stock’s 107% year-to-date surge has left it vulnerable to corrections if expectations fall short.

Investment caution is advised due to stretched valuations and mixed analyst sentiment. While PLTR’s business fundamentals remain solid, alternatives like defense contractors Lockheed Martin and RTX offer lower volatility and more conservative multiples. These firms benefit from stable defense backlogs and forward P/E ratios below 25x, contrasting with PLTR’s elevated risk profile. Market participants are urged to monitor earnings closely for signals of sustainability amid high expectations.

A backtesting analysis of a strategy buying top 500 liquid stocks daily and holding for one day showed a 166.71% return from 2022 to present, outperforming benchmarks by 137.53%. This underscores the strategy’s effectiveness in capturing liquidity-driven momentum, though its success may not guarantee future performance.