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Investors Rotate Out of Palantir Despite Surging Growth

Valuation worries now outweigh Palantir’s rapid growth.

Overview

  • Palantir shares have fallen about 30% from a late‑October peak and roughly 20% year to date, giving back part of a multi‑year AI rally.
  • The company reported fast growth, with fourth‑quarter revenue up 70% from a year ago and full‑year revenue up 56% compared with 2024’s 29% pace.
  • For 2026, Palantir guides revenue to $7.18 billion to $7.19 billion, which tops 60% growth, and it targets adjusted income from operations of $4.126 billion, up about 83%.
  • Valuation remains stretched, with a trailing price‑to‑earnings ratio near 289, a forward P/E near 116, and a recent price‑to‑sales ratio around 86.
  • Yahoo Finance coverage cites profit‑taking, rotation out of pricey AI names, and SEC‑disclosed insider sales as pressure points, and one author now predicts the stock could slip below $100 before 2026 ends.