Wall Street wrote off Palantir as too expensive. Retail investors can't get enough

Core Viewpoint - Palantir Technologies has become a favorite among retail investors, with significant stock purchases and impressive gains, despite Wall Street's skepticism regarding its valuation. Group 1: Retail Investor Activity - Retail investors are projected to buy nearly $8 billion in Palantir stock in 2025, marking an increase of over 80% from the previous year and over 400% from 2023 [3] - The stock is on track to be the fifth-most bought security in 2025, following major companies like Tesla and Nvidia [4] - Palantir's shares have surged more than 150% in 2025, contributing to a nearly 3,000% increase over the last three years, significantly outperforming the S&P 500 and Nasdaq Composite [5][6] Group 2: Company Performance and Business Model - Palantir assists both government and corporate clients in organizing data, benefiting from the AI adoption trend and government efficiency initiatives [6] - The company's revenue is more diversified than initially perceived, with partnerships extending to consumer brands like Ferrari and Wendy's [7] - Despite a 16% drop in November due to valuation concerns, Palantir's overall performance remains strong, with retail buying concentrated in the first nine months of the year [9] Group 3: Market Perception and Analyst Views - Wall Street analysts generally hold a cautious stance, with an average hold rating due to concerns over Palantir's high valuation, which stands at around 450 times trailing earnings compared to the S&P 500's average of about 28 [13] - Retail investors are drawn to Palantir's ambitious mission and the charismatic leadership of CEO Alex Karp, who has been compared to Elon Musk in his ability to sell a vision [14] - The stock has been a topic of discussion on platforms like WallStreetBets, indicating strong retail interest despite mixed opinions on its ethical implications [11][12] Group 4: Future Outlook - Retail investors remain optimistic about Palantir's potential, viewing price fluctuations as opportunities to buy more shares [20] - The company has experienced volatility, with significant price swings, but investors like Dijamco express confidence in its long-term success [21]