Palantir Is Dominating AI In 2025—But Its Valuation Is Terrifying!

Palantir Technologies has been one of 2025’s biggest winners in the AI equity space, delivering a jaw-dropping rally of nearly 140% year-to-date. Following a selloff in mid-August that briefly interrupted its meteoric ascent, the stock has rebounded strongly and remains a key beneficiary of enterprise AI spending and hyperscaler capital expenditure cycles. The company’s Q2 results added fuel to the rally, showcasing record-breaking revenue of over $1 billion, a 48% year-overyear increase, and a staggering Rule of 40 score of 94%. Palantir’s U.S. commercial business grew by 93%, underlining strong demand for its AI Platform (AIP) from sectors ranging from healthcare to defense. Yet, analysts remain divided. While they acknowledge Palantir’s technological edge and operational excellence, many have issued “Hold” ratings, pointing to valuation metrics that have spiraled far above industry norms. As the AI narrative accelerates, the stock’s extreme valuation has become an increasing point of caution among market observers.