So Palantir (PLTR) just face-planted 25% from its November highs, and everyone’s asking the same question: Is this the beginning of the end for AI stocks, or just a really expensive lesson in “what goes up must come down”?
Here’s the deal: Despite Wall Street’s cheerleaders insisting Palantir is about to rocket to the moon (thanks to growing revenue, fat profits, and cash flow that would make Scrooge McDuck jealous), the market is basically giving them the cold shoulder. Yesterday alone, shares dropped another 6% as tech stocks got hammered harder than a nail in a construction zone.
Even Nvidia’s Jensen Huang tried to calm everyone down about AI bubble fears after his company’s stellar earnings, but guess what? NVDA still closed lower. When the king of AI chips can’t catch a break, you know sentiment is shakier than a chihuahua in a thunderstorm.
The Bulls Are Still Bullish (Shocking, Right?)
A small but loud group of analysts are basically screaming “BUY THE DIP!” from the rooftops. They’re predicting Palantir’s U.S. commercial business will keep growing at 70-100% annually because their AI platform is apparently so good that companies are signing deals after just a few days of “bootcamp” demos. Talk about a hard sell that actually works.
These optimists think 2026 revenue could triple-digit surge, earnings could jump from $0.90 to $5.50 per share, and operating cash flow might hit $2 billion (a 500% increase). If they’re right, buying PLTR at $156 would be like getting a Tesla for the price of a Honda Civic.
The bull case basically boils down to this: Once companies get hooked on Palantir’s software, switching costs are so high they’re stuck like gum on a shoe. It’s the digital equivalent of a really expensive subscription you can’t cancel.
The Bears Aren’t Having It
But hold your horses, because most analysts are playing it safe with “Hold” ratings and price targets that suggest the upside is about as limited as a vegan’s options at a BBQ joint. They’re expecting growth to slow down to a “mere” 40% by late 2026 as the AI hype train inevitably runs out of steam.
Here’s the kicker: Palantir is trading at 180x forward earnings. That’s not a typo. For context, that’s like paying $180 for a $1 lottery ticket and expecting to win big. When valuations are this stretched, there’s zero room for error.
Plus, company insiders have been selling over $250 million worth of stock recently. When the people who know the company best are cashing out, it might be time to ask some hard questions.
The Bottom Line
Look, Palantir could absolutely prove the bulls right and become the next big thing in AI software. But with valuations this crazy and AI sentiment cooling faster than leftover pizza, this 25% dip might just be the appetizer before the main course.
If you’re risk-tolerant and believe in the AI revolution, this could be your chance to buy a potential winner on sale. But if you prefer sleeping at night without checking your portfolio every five minutes, maybe wait for some clearer signs that this rocket ship actually has fuel in the tank.