NEW YORK – In a market where huge gains are rare, AI software firm Palantir Technologies (NASDAQ: PLTR) is in an elite class, having soared over 70% year-to-date. But this meteoric rise has ignited a fierce debate on Wall Street, creating a stark divide between one of tech’s most vocal bulls and a broad consensus of cautious analysts.
The central conflict pits the visionary optimism of Wedbush analyst Dan Ives against a wall of skepticism concerned with the company’s sky-high valuation.
The Bear Case: Why Most of Wall Street Is Pumping the Brakes
Despite Palantir’s incredible momentum, the majority of financial analysts remain unconvinced. According to recent LSEG data from a survey of 25 analysts, a staggering 21 of them recommend either holding the stock or selling it outright. Only four maintain a “buy” rating.
This pessimism is even more pronounced in their price targets. The average 12-month target for PLTR sits more than 23% below its current share price. One firm, RBC Capital, projects a gut-wrenching plunge of nearly 70% down to $40 per share.
Two primary concerns are fueling this caution:
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Slowing Growth: While Palantir still projects a robust revenue jump of roughly 36% for 2025, this indicates a slowdown from the growth rate seen in the first quarter, suggesting its hyper-growth phase may be moderating.
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An “Unjustifiable” Valuation: This is the biggest hurdle for most analysts. Palantir trades at a dizzying 238 times forward earnings. Its price/earnings-to-growth (PEG) ratio, a key metric for growth stocks, is a lofty 4.18, signaling that its price may have far outpaced its expected earnings growth.
Jefferies analyst Brent Thill put it bluntly, arguing that even if Palantir grew at an aggressive 50% annually for five years, it would still be the most expensive software stock on the market by 2030.
The Bull Case: Why Dan Ives Sees a $1 Trillion Company
Standing in stark opposition is Dan Ives, Wedbush’s head of technology research and one of Wall Street’s most influential voices. Ives has crowned Palantir “the Messi of AI,” comparing it to the legendary soccer icon and suggesting it is in a league of its own.
While most of Wall Street sees risk, Ives sees a generational opportunity. He predicts that Palantir’s market cap will swell to $1 trillion within the next two to three years—more than triple its current size.
His bullish thesis rests on two core beliefs:
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Market Dominance: Ives believes a $2 trillion tsunami of spending is coming to the AI software market, and Palantir is uniquely positioned to capture a significant share.
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Valuation is a Rear-View Mirror: He dismisses the valuation concerns, telling CNBC that investors who focused too heavily on valuation metrics missed out on the historic runs of game-changing companies like Nvidia and Tesla.
Who’s Right? The Investor Takeaway
The intense dissonance over Palantir highlights a fundamental conflict in tech investing: do you bet on visionary, long-term disruption or stick to grounded, near-term fundamentals?
For now, the “big money” appears to be siding with the skeptics. Analysts like Thill note a lack of institutional interest in Palantir, suggesting its recent rally has been primarily fueled by retail investors. Following institutional capital is often seen as a prudent strategy.
Ultimately, investing in Palantir today is a bet on which narrative will win out. If Dan Ives is right, early investors could be rewarded with returns reminiscent of other tech titans. But if the broad Wall Street consensus is correct, the stock’s astronomical valuation leaves it vulnerable to a sharp and painful correction. It’s a high-stakes battle between a potentially revolutionary future and a very expensive present.
