Retail Investors Love Palantir Stock. Wall Street Experts Don't. Who's Right?

Core Insights - Palantir Technologies (NASDAQ: PLTR) is highly favored among retail investors, ranking as the seventh-most owned stock on Robinhood Markets despite not being in the top 25 U.S.-listed companies by market cap [1] Group 1: Retail Investor Sentiment - Retail investors have significantly driven Palantir's stock momentum, resulting in over 106% return year-to-date [2] - Despite warnings from Wall Street analysts regarding the sustainability of the current stock price, the stock continues to rise, leading to a bearish outlook among analysts, with only seven out of 29 rating it a buy or equivalent [2][7] Group 2: Business Growth and Strategy - Palantir is leveraging generative artificial intelligence (AI) to enhance its commercial business and secure large government contracts, which provide a stable revenue base [4] - The launch of its Artificial Intelligence Platform (AIP) in 2023 has been a significant growth driver, enabling users to interact with the software using natural language, thus broadening its user base [5] Group 3: Financial Performance - In the most recent quarter, Palantir reported a 48% increase in sales, with U.S. commercial revenue soaring by 93%, and an adjusted operating margin expansion to 46% from 44% [6] - The company's Rule of 40 score, which combines revenue growth rate and operating margin, stands at 94, indicating strong financial health [6] Group 4: Valuation Concerns - While Palantir's share price has more than doubled in 2025, concerns persist regarding its inflated valuation despite strong revenue growth and expanding operating margins [8]