AI stock Palantir (NASDAQ:PLTR) is having an incredible run at the moment. This year, it has soared from $76 to $173 – a gain of almost 130%.
Could the high momentum growth stock go on to hit $500 at some point? Let’s take a look at the set-up.
Incredible numbers
Thanks to its Artificial Intelligence Platform (AIP) – which helps organisations leverage their data and deploy AI – Palantir is generating an extraordinary level of growth at present. Earlier this week, the company posted its earnings for the second quarter of 2025 and the numbers were sensational.
For the period, group revenue grew a whopping 48% year on year to $1bn (versus analysts’ forecast of $940m). Breaking this down, US revenue was up 68% while US commercial revenue was up an incredible 93%.
During the quarter, the firm closed 157 deals of at least $1m, plus 66 deals of at least $5m, and 42 deals of at least $10m. Meanwhile, it closed a record-high $2.27bn of total contract value (TCV), up 140% year on year.
On the back of this performance, the company raised both its Q3 and full-year guidance. It now expects growth of 50% and 45% for Q3 and 2025, respectively.
Entertaining commentary
I’ll point out that the company’s Q2 letter to investors was quite entertaining (as usual). “The growth rate of our business has accelerated radically, after years of investment on our part and derision by some,” wrote CEO Alex Karp. “The skeptics are admittedly fewer now, having been defanged and bent into a kind of submission. Yet we see no reason to pause, to relent, here.”
Is $500 a possibility?
Looking at the numbers and reading the commentary, it’s clear that this technology company is having an incredible amount of success at the moment. As businesses embrace AI, it’s in the right spot at the right time.
But what about the stock though? Is $500 a possibility?
Well, if Palantir can continue growing at an explosive rate and investor sentiment remains bullish, then yes, I think it could be a possibility. When a company is growing its top line at 40%-50% a year, it can get significantly bigger very quickly.
It’s worth noting that CEO Alex Karp wants to grow revenues 10-fold. If he was able to do that, the stock would almost certainly hit $500.
Having said that, I wouldn’t be surprised to see this stock experience a large fall (30% or more) before it gets to $500. Because the share price has gone up exponentially recently and that kind of trajectory typically leads to volatility.
If Palantir was to experience a bad quarter (due to lower spending on AI solutions, for example), its share price could drop sharply. The stock could also see some profit-taking if there was a market pullback (which is a real possibility in the near term).
It’s worth noting that currently, the stock trades on a price-to-sales ratio (not price-to-earnings ratio) of about 100. That’s a very high multiple and it leaves no room for a mis-step.
Given that lofty sales multiple, I’m not a buyer of the stock today. However, if the share price and valuation were to come down, I may be interested in taking a position here as this company appears to be right at the heart of the AI revolution.
