Is Palantir Stock a Buy for 2026?

Core Viewpoint - Palantir has demonstrated exceptional stock performance over the past three years, with significant growth in both government and commercial sectors, but concerns about future growth rates and high valuation persist [2][6][7]. Company Performance - Palantir's stock rose 135% in 2025, following increases of 341% in 2024 and 167% in 2023, marking three consecutive years of at least doubling in stock value [2]. - In Q3, Palantir's total revenue increased by 63% year over year to $1.18 billion, with government revenue rising 55% to $633 million and commercial revenue increasing by 73% to $548 million [6]. Market Position - Palantir operates in the artificial intelligence software sector, which is considered a strong long-term investment compared to hardware plays [3]. - The company has established deep relationships in the government sector, which still constitutes the majority of its revenue, while also achieving significant success in the commercial sector [4]. Valuation Concerns - Palantir's stock is currently trading at 117 times trailing sales and 176 times forward earnings, making it one of the most expensive stocks in the market [8]. - Analysts project a 54% revenue growth for Q4 and 43% for FY 2026, which raises concerns about the sustainability of growth needed to justify its high valuation [7]. Growth Expectations - There is a belief that multiple years of growth are already priced into Palantir's stock, suggesting that the current valuation may not be sustainable if growth rates do not accelerate [12][13]. - The company would need to maintain a growth rate of 50% over the next four years to reach a more reasonable valuation, which exceeds Wall Street's projections [11][13].