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Palantir (PLTR) has been a red-hot investment over the past year, with shares surging more than 200%, showcasing its immense growth. As the stock reaches new highs, some insiders have offloaded shares.
In the last six months, there have been 49 insider sales as tracked by Barchart. CEO Alex Karp also recently filed to sell shares under a 105b-1, a prearranged trading plan. He has authorization to sell roughly 10 million shares through Sept. 12.
CTO Shyam Sankar has also gained investor attention for multiple sales over the past two weeks, worth roughly $38 million. According to an SEC filing, these sales were all in conjunction with his 10b5-1 trading plan. Several were marked as the result of restricted stock units that vested. Sankar converted these into common stock and then sold. The filing states that “all sales were automatic sales of shares to cover require tax withholding obligations in connection with the vesting event.”
As tracked by Barchart, there have been 0 insider buys over the past 6 months. One reason for this may be that executives receive stock-based compensation, removing the incentive to purchase shares.
About PLTR Stock
After reaching an all-time high of $125.41 in mid-February, PLTR stock has nosedived nearly 33% following a broader selloff in AI and defense stocks. Many believe this drop was also influenced by Karp’s trading plan, along with concerns over a shrinking defense budget.
However, the stock regained some momentum, climbing nearly 7% on Wednesday, March 5 after Willam Blair upgraded it to a “Market Perform” rating. Yet, the rebound was short-lived, as shares plunged 10% the following day.
Palantir’s Growth Story
With a market cap of almost $200 billion, Palantir’s business is flourishing with government contracts, driving robust revenue growth in an increasingly competitive tech landscape. The company has secured multiple high-value deals with national security and intelligence agencies, reinforcing its reputation as a critical provider of advanced data analytics solutions.
Its growth is driven by a powerful combination of long-term government contracts and surging commercial revenues. In Q4, the company achieved its sixth consecutive quarter of year-over-year revenue growth, with a 36% increase to approximately $827 million, well above market expectations. Notably, Palantir secured 129 deals worth at least $1 million each, along with 32 deals exceeding $10 million, highlighting its expansion into high-value, strategic contracts. Government deals, which are notoriously difficult to secure but exceptionally lucrative, remain a cornerstone of its growth story.
The U.S. commercial segment deserves special mention, with revenues rising 64% year-over-year and total deal values nearly doubling. This growth isn’t just a temporary surge; it reflects the expansion of enterprise AI budgets and sustained demand for sophisticated analytics solutions. As generative AI continues to evolve, Palantir’s AIP platform is becoming indispensable for industries ranging from finance to logistics, ushering in a new era of operational efficiency.
Karp’s recent shareholder letter reinforces this optimistic outlook, emphasizing that “we are only at the beginning of a transformation that could span decades.” The company’s aggressive growth trajectory has pushed its revenue run rate to nearly $4 billion, up from about $3 billion in 2024, positioning it for even faster profit expansion.
Valuation Analysis
Palantir currently trades at 140x adjusted forward earnings and 52x forward sales, 585% and 1,796% above the sector medians of 22x and 3x, respectively.
The company expects 2025 revenue of roughly $3.75 billion, driven by commercial growth exceeding $1 billion, which translates into roughly $1.6 billion in adjusted free cash flow and a sub-1% FCF yield. To justify these lofty multiples, Palantir would need to achieve a 10x-15x expansion in FCF over the coming years. Notably, management’s guidance of nearly 30% annualized adjusted FCF growth suggests that within 7-8 years, FCF could reach levels that validate its current valuation.
However, even under these aggressive assumptions, it might take 17-20 years for investors to fully recover their investment, underscoring the stock’s current overvaluation. Nonetheless, many view the share price weakness as a unique opportunity to add to what could be our top tech pick for the decade.
Analysts’ Opinion on PLTR Stock
In addition to the William Blair upgrade, Wedbush analysts reaffirmed Palantir as a “top pick for 2025,” maintaining a $120 price target. Wedbush noted that Palantir is well-positioned to secure more contracts and IT funding amid rising federal AI investments despite broader government budget cuts.
Despite some of these bullish calls, Wall Street remains cautious, maintaining a consensus “Hold” rating on the stock.
The stock is trading near its average price target of $85.11, but the Street-high target of $141 suggests more than 70% potential upside from current levels.
