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Valued at a market cap of $217 billion, Palantir (PLTR) builds and deploys enterprise software platforms that are known for assisting in counterrorism and other national security investigations. The ongoing market turbulence has dragged PLTR stock lower by 24% from its all-time highs as investors are worried about slower government spending and high valuations.
Palantir generates a sizeable portion of its revenue from government agencies. However, the U.S. government has enacted plans to slash spending across government programs, making PLTR stock investors nervous.
According to a Wired report, the Internal Revenue Service (IRS) is collaborating with Palantir to develop a “mega API” to create a unified access layer for IRS databases. The initiative is part of Elon Musk’s Department of Government Efficiency (DOGE) efforts.
The three-day project, described as a “hackathon,” brought together DOGE representatives, Palantir staff, and career IRS engineers to work on building an API layer that could potentially provide access to all IRS data systems.
Wired explained that Palantir’s Foundry software would become the centralized access point for IRS systems, potentially allowing AI-powered queries of taxpayer information, including names, addresses, social security numbers, and tax returns.
Is Palantir Stock a Good Buy Right Now?
Palantir has expanded its software portfolio to include four principal platforms: Gotham, Foundry, Apollo, and its newest offering, the Artificial Intelligence Platform (AIP). The data analytics company generated $2.9 billion in revenue in 2024, with 55% coming from government clients and 45% from commercial customers.
Palantir’s AIP, launched in 2023, integrates large language models with existing platforms, enabling organizations to implement AI within their operations while maintaining security and compliance requirements. Further, Palantir has accelerated customer acquisition through “AIP boot camps,”allowing potential clients to experience the platform with their own data in just days.
Palantir ended 2024 with a total remaining deal value of $5.4 billion, a 40% increase from 2023. Commercial contracts grew even faster, up 47% to $3.1 billion, while government contracts rose 30% to $2.3 billion.
Palantir has focused on developing industry-specific operating systems across sectors, including airlines, insurance, healthcare, automotive, and government.
The average revenue from Palantir’s top twenty customers grew to $64.6 million in 2024, up from $54.6 million the previous year, demonstrating its ability to expand existing relationships. The firm serves approximately 711 customers across 90 industries, with 66% of revenue coming from the United States and 34% from international clients.
Palantir ended 2024 in a strong financial position with $5.2 billion in cash, cash equivalents, and short-term U.S. Treasury securities, while generating positive cash flow from operations. The tech juggernaut remains debt-free, with an additional $500 million in undrawn revolving commitments available under its credit facility.
Is PLTR Stock Overvalued in 2025?
Nvidia’s forward adjusted price-earnings multiple stands at 167x, which is higher than its three-year average of 77x. Palantir is forecast to grow its revenue by 31.6% annually in the next five years, similar to its 31% growth in the last five years. Its adjusted earnings are projected to expand by 36% annually between 2025 and 2030, a much higher rate than its previous four-year growth rate of 16.5%.
Out of the 20 analysts covering PLTR stock, three recommend “Strong Buy,” 12 recommend “Hold,” one recommends “Moderate Sell,” and four recommend “Strong Sell.” The average target price for PLTR stock is $84.53, indicating downside potential of over 10% from current levels.
