Palantir Stalls at 65x Sales Despite 93% Growth

Palantir just turned in the sort of quarter most software companies can only dream about: revenue up 93% year over year to $1.94 billion, another beat-and-raise, and a U.S. commercial business growing 149%. The stock took the news and mostly shrugged. It trades near $168 today, roughly 19% below its 52-week high of $207.52, and it has spent the last few weeks drifting lower.

When a company beats, raises guidance, and the price won't budge, the "no" is coming from the price—not the business. That is the whole Palantir story right now, and it's worth unpacking before anyone decides whether the stall is a buying opportunity or a warning.

A $225 target that just says "recover the old high"

Here is the tension. On Friday, Rosenblatt reiterated its Buy rating on Palantir with a $225 price target after the company's 11th customer forum, pointing to roughly 35% to 36% upside from the current price. On its face that sounds like a strong endorsement—36% upside is real upside.

Now put that number in context. The stock's 52-week high is $207.52. Rosenblatt's $225 target is only about 8% above where Palantir already traded this year. The "36% upside" the target promises is mostly the market giving back ground it has lost since the stock ran up and stalled. The target isn't saying "Palantir goes somewhere new." It's saying "Palantir gets back to roughly where it already was."

That is the tell. When even a bullish analyst's target merely recovers the old high, the market has stopped paying up for the story—even as the underlying business keeps compounding.

The most expensive software stock, measured against sales

The reason is the multiple. Palantir trades at roughly 65 times trailing sales and about 134 times trailing earnings, against a market cap around $403 billion. A price-to-sales ratio simply measures how much you pay for every dollar of revenue—and at 65x, investors are paying $65 for each $1 Palantir booked over the past year.

Compare that to peers in the same premium-software orbit: Datadog trades near 20x sales, CrowdStrike near 39x. Palantir is the most expensive of the group by a wide margin. Even a stock like Snowflake, famous for trading rich, sits well below it.

At this level, the price is not discounting the next quarter, or even the next year. It is discounting years of uninterrupted hyper-growth.

Growth-adjusted, it's not the most expensive—and that's the nuance

But here is where the "no stock is absolutely expensive" discipline matters. A 65x sales multiple only looks indefensible if you ignore what you're buying per dollar. Palantir isn't growing like a 20x-sales company.

Its revenue is expanding roughly 80% year over year on a trailing basis, with gross margins near 85% and free-cash-flow margins above 50%. That combination—fast growth and exceptional profitability at the same time—is the single best-quality profile in the software group. Stacked against that growth, the stock's price-to-earnings-to-growth, or PEG, is around 0.47; by that growth-adjusted measure, Palantir is not the most expensive name on the board.

Strip out the footnote and this is the real economics: the market is not shelving Palantir because the business is deteriorating. The report card keeps coming back with straight A's on fundamentals. The stall is because the price already embedded the growth. There is no room left for a surprise on the upside, only a hair-trigger for disappointment on the downside.

The trap in the forward multiple

Run the number forward and you can feel how thin the cushion is. Management now guides to roughly $8.15 billion in full-year 2026 revenue. Against the ~$400 billion valuation, that is about 49 times forward sales—meaning the stock is still priced as if Palantir will become one of the largest software companies in history.

To hold that multiple, revenue has to keep compounding at something like 40%-plus for years. Doing that gets harder with every 100% quarter, because the base keeps getting bigger. As the analyst note framing put it, there is almost no room for execution error. A single quarter of deceleration—not even a miss, just less blowout—would reset the multiple far more violently than the earnings line.

That is the uncomfortable math behind the "stall." The momentum on the price chart is neutral at best: Palantir sits above both its 50-day and 200-day averages, but its relative-strength reading is right at 50 and the stock is down on the year. Meanwhile AInvest's aggregate signal stays a Buy, with a 9.4-out-of-10 fundamental rating. The factor stack is unambiguous: the business grades A, the price grades C. A great company can still be a fully-priced stock.

What a fully-priced grower means in a portfolio

For an investor with no position, the question isn't "is Palantir a good business?"—it plainly is, and the numbers keep proving it. The question is what role the stock can play at this price. At roughly 49 times forward sales, this is a high-beta growth sleeve, not a value or safety holding. It is the kind of concentrated position you size so that a 40% drawdown wouldn't break the plan, because at this multiple the price risk dwarfs the business risk.

The disciplined frame, neither chase nor panic: don't buy it expecting to collect Rosenblatt's 36% to target as a reward—that target mostly restores an old high. And if you already own it, don't mechanically sell a proven winner just because the valuation grew warm. Hold it inside a size cap you're willing to defend. The trigger that would change the story isn't a headline or a price target. It's the day the 90%-growth quarter turns into a 40%-growth quarter—because at 65x sales, the market will notice that inflection long before the narrative does.