The Motley Foolยท2025-10-17 09:00Core Insights - Palantir Technologies has seen significant stock price increases, but its valuation metrics suggest it may be overvalued compared to its growth potential [2][5][10] - Other tech companies like AMD and ASML are positioned to surpass Palantir's market capitalization due to more reasonable valuations and strong growth prospects [3][15] Palantir Technologies - Palantir's stock has increased approximately 2,700% since the beginning of 2023, while its revenue has only grown by 80%, indicating a disconnect between stock price and actual financial performance [5] - The current price-to-earnings ratio for Palantir is close to 600, with a price-to-sales ratio of 130 and a forward earnings multiple of 276, suggesting that much of the expected future growth is already priced in [5][10] - If Palantir can sustain a 50% revenue growth rate over the next six years, it would still be valued at 31 times forward earnings, which is high compared to competitors like Nvidia [9][10] AMD - AMD has recently partnered with OpenAI to supply up to 6 gigawatts of computing power, which could enhance its market position and lead to increased stock excitement [11][12] - AMD's stock has already risen by about 40% in October, and if business gains follow, it could surpass Palantir in market capitalization within a year [12] - AMD is currently trading at 55 times forward earnings, which is significantly lower than Palantir's valuation [15] ASML - ASML holds a technological monopoly in extreme ultraviolet (EUV) lithography machines, essential for manufacturing high-end chips, making it a critical player in the AI sector [13][14] - The demand for ASML's machines is expected to rise, supporting solid growth projections for the company in 2026 [14] - ASML's forward earnings multiple is 35, which is more reasonable compared to Palantir's valuation, positioning it as a better investment opportunity [15]