Will Palantir Continue to Skyrocket in 2026?

One of the most impressive growth stocks in recent years, Palantir (NASDAQ:PLTR | PLTR Price Prediction) has also become among the most discussed names in the market. With a market capitalization that’s now approaching $500 billion, and some expectations that this stock could be another entrant into the $1 trillion club, growth investors everywhere are cheering CEO Alex Karp and its team on. 

Well, most investors. There are other prominent figures in the world of finance such as Michael Burry who have spoken out against Palantir’s valuation, believing this fast-growing stock doesn’t have the fundamentals to support its current market capitalization. 

With that in mind, let’s do a deep dive into the bull and bear case surrounding Palantir and come to a conclusion around where this stock is likely headed in the New Year.

The Bull Case

Bull market visual

Given Palantir’s astronomical 155% year-to-date return and surge of more than 650% over the past five years, investors have clearly profited from buying this stock and closing their eyes when it comes to the company’s valuation multiple. 

Indeed, for investors who believe that this recent surge in both revenue and profit growth is just the beginning, then there’s a solid buying thesis that can be made around why this stock is worth buying here. A confluence of accelerating revenue, earnings and margins over time could mean that Palantir is still undervalued, even at 125-time forward sales. 

Just how high Palantir’s core metrics could surge really depends on how adoption for its Gotham, Foundry and AIP deployments progresses. Thus far, growth has been impressive on all three fronts, with 55% U.S. sales growth driven by 71% commercial growth (mostly within its AIP business) driving incredible increases in ARR. Impressively, entrenched government contracts also supply around 55% of the company’s revenue, and these contracts are likely to continue moving forward.

But it’s Palantir’s growth in its commercial segment that has most investors excited. If Palantir can become the big data company of choice for not only leading U.S. government agencies, but tech companies and economic powerhouses in various sectors of the economy, then Palantir could theoretically become the backbone of the U.S. economy – making its valuation today small in comparison to its future potential. 

The Bear Case

A bear emblem on a white keyboard

Now, to Michael Burry’s bear case (which I’d argue is generally pretty widespread not only among big-named investors, but many who are skeptical of the overall narrative around AI right now). 

Palantir’s valuation is downright extreme, at more than 125-times sales and nearly 200-times forward earnings. These numbers exceed those of most major mega-cap tech stocks, even at their peak growth years. Thus, investors in Palantir today have to believe that this company will essentially continue to grow at a rate only a handful of companies have for decades upon decades, and do so with margins that don’t deteriorate over time. 

My bear case can be noted in a recent piece I penned on why I think this company could be the most overvalued in history, and I think that piece is worth a read. I’m giving away my prediction section below, but this thesis really is just expanding on the already amazing work of Burry and others, who have called Palantir one of the most obvious short opportunities in the market right now. I couldn’t agree more. 

Palantir’s Future in 2026

Crystal ball with a dollar sign

My position on Palantir continues to be bearish, simply because I’m of the view that the future value AI will create is ultimately unknown. I think corporate and government spending on AI-related tools will ultimately slow over time (maybe there will be growth, but it won’t be at this incredible pace forever).

And while Palantir is certainly one of the best companies in the market at integrating artificial intelligence technology in a way that does appear to be boosting near-term profits, I’m not so certain these dynamics will continue much further than 2026. In fact, it’s my base case we’ll start to see a deceleration of growth in the coming quarters, which could impact PLTR stock in a massive way.

Thus, I’m essentially with Michael Burry on this one.