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Palantir (PLTR) climbed sharply on Monday, March 24 to close at $96.75 as the broader market showed optimism regarding tariffs. However, not all on Wall Street are convinced the pain is over for the big data analytics company. On one hand, it now trades at above 728 times trailing earnings and over 71.5 times sales. But on the other hand, you could be missing out on a great buy-the-dip opportunity if tariff fears fade and the stock keeps climbing.
Analysts have been divided on the stock for a long time. Palantir has trounced bearish analysts over the past few years with consecutive earnings beats and a premium on the stock that hasn’t been seen since the dot-com era. Right now, most investors are asking, “Now what?”
Can PLTR Rally Back to $125?
Tariff-related fears are mostly to blame for the broader market selling off over the past few weeks. For Palantir, tariffs are not the only thing that investors stay up at night about. President Donald Trump’s administration has also hinted at defense budget cuts that could hurt Palantir’s government contracts significantly.
Even if tariff fears were to go away, Palantir would have trouble climbing back to its previous highs. The stock is priced for perfection right now, and any execution missteps can send it down significantly. The selloff does sweeten the deal for those looking to buy the dip, but the downside risk is still massive compared to the potential upside.
Palantir peaked at $125.41, and there’s a chance it can go back up to that level and beyond if the AI narrative returns in full force. In my opinion, the chance of it correcting further is more likely. Loop Capital analyst Mark Schappel has his price target at $125, but even that has been lowered from $141. Schappel has the Street-high target on the name.
Can PLTR Stock Decline to $18?
It’s very unlikely that you’ll see PLTR stock trade below $20. And if it does, Palantir won’t be the only company plunging. The AI narrative would have to fail completely, and the tech sector would have to enter a dot-com-esque bust for Palantir to trade that cheaply.
$18 is the price target from Monness Crespi & Hardt all the way from August 2024. The analyst rated PLTR a “Sell” and lowered the target from $20 to $18. There have been no reiterations or upgrades from Monness Crespi since.
Even the most bullish analyst would not have expected PLTR to deliver such gains in less than a year. This makes the $18 price target completely unreasonable in 2025. If we look at more recent ratings, a Royal Bank of Canada analyst has an “Underperform” rating with a $40 price target. This is much more realistic and could be possible if the market selloff continues.
The Bottom Line: $125 or $18 for PLTR?
$125 is much more likely for PLTR compared to $18. That said, I believe PLTR still doesn’t offer a good bang for your buck at current prices. The mean price target at $84.22 still implies more downside. Plus, only three out of the 19 ratings are “Buy” ratings.
There’s significant downside risk compared to the upside potential. The market needs more than just softer tariffs for a sustained rally to hold up the premium here for the long run.
