Palantir Surges to 13th in U.S. Trading Volume as AI Optimism Fuels Earnings Rally and Analyst Upgrades Amid Valuation Debate

Market Snapshot

On November 26, 2025, Palantir Technologies (NASDAQ: PLTR) closed with a 1.36% increase in share price, adding to a 6.8% weekly gain. The stock’s trading volume reached $5.69 billion, ranking it 13th in daily trading activity among U.S. equities. This surge followed a strong earnings report, with Palantir surpassing revenue and earnings estimates, and raising full-year guidance to $3.9 billion. Despite the rally, the stock’s valuation remains contentious, with a price-to-earnings ratio of 386.32 and a price-to-sales ratio of 108, reflecting both optimism about its AI-driven growth and skepticism about sustainability.

Key Drivers

Analyst Upgrades and Strategic Positioning in AI

Wedbush analyst Dan Ives raised his price target for Palantir to $160 from $140, citing the company’s potential to rival Oracle in scale and its positioning at the forefront of the AI revolution. Ives emphasized that Palantir’s software platforms, particularly its Artificial Intelligence Platform (AIP), are enabling enterprises to harness AI for data analytics, a critical advantage in a market projected to grow at 35.9% CAGR through 2030. Analysts at Deutsche Bank and Cantor Fitzgerald also raised price targets, reflecting broader institutional confidence in Palantir’s ability to capture market share as companies allocate trillions to AI adoption.

Revenue Growth and Margin Expansion

Palantir’s third-quarter earnings report highlighted robust financial performance, including $1.18 billion in revenue (a 48% YoY increase) and a 46% adjusted operating margin. The company’s U.S. commercial revenue surged 93% YoY, driven by a 43% rise in customer count and 139 deals of at least $1 million. Government contracts, a cornerstone of Palantir’s growth, grew 52% YoY, including a $10 billion 10-year U.S. Army deal and a $30 million contract with the Department of Homeland Security. CEO Alex Karp underscored the company’s ability to scale, forecasting a 10x revenue increase over five years and a 68% jump in commercial revenue to $1.178 billion in 2025.

Valuation Concerns and Market Volatility

Despite strong fundamentals, Palantir’s valuation remains a point of contention. The stock’s forward P/E ratio of 161.29 and P/S ratio of 108 are significantly higher than peers like Oracle (P/S of 11x) and Microsoft (P/S of 15x). Critics argue that the stock’s current price implies a century-long payback period for investors assuming no growth, while bulls point to Palantir’s recurring revenue model and expanding margins. Recent volatility, including a 9% post-earnings drop, reflects market uncertainty. While analysts project a 12-month price target of $172.28 (6.18% upside from current levels), the wide spread in forecasts—from $18.50 to $255—highlights divergent views on its long-term potential.

Institutional and Retail Investor Dynamics

Institutional ownership in Palantir has fluctuated, with JPMorgan and T. Rowe Price reducing positions by 32% and 24%, respectively, amid valuation concerns. Conversely, Palantir’s inclusion in the S&P 500 and Nasdaq-100 has attracted long-term investors, with the stock becoming the 28th largest holding in the Vanguard S&P 500 ETF. Retail investors, many of whom bought shares during its 2022 IPO at under $10, view a potential pullback to $90 as a buying opportunity, given the company’s transition from a niche data contractor to a mainstream AI leader. However, the recent surge has pushed the stock to all-time highs, testing the patience of skeptics who anticipate a correction to more sustainable multiples.

Future Outlook and Competitive Landscape

Palantir’s ability to maintain its growth trajectory will depend on its execution in key areas. The company’s $3.9 billion in cash reserves and $3.9 billion revenue target for 2025 provide flexibility for R&D and market expansion. However, competition from large AI firms and smaller analytics startups could pressure margins. Analysts project a market cap of $1 trillion within two to three years, contingent on sustained revenue growth and margin expansion. Meanwhile, geopolitical tailwinds, including U.S. government contracts and NATO partnerships, position Palantir as a critical player in national security and defense AI. The stock’s performance will likely hinge on its ability to balance high valuation expectations with tangible growth in enterprise adoption and profitability.