Palantir (NASDAQ:PLTR | PLTR Price Prediction) stock has made remarkably little progress in the past few months. It is below the level it was in August 2025, so concerns about a plateau seem quite valid. The momentum that carried it from $20 in April 2024 to over $200 in October 2025 seems lost. That said, no one knows what kind of paradigm shift 2026 may bring for the company as defense tech spending remains hot.
The business itself is humming on strong, with the full-year 2025 plus Q4 report expected to be out on the 2nd of February. This may reinvigorate the bulls and push the stock beyond $200 again if Palantir reports another blockbuster quarter.
But some analysts believe $200 is just a stepping stone to an even more ambitious valuation: $1 trillion. Let’s first look at where Palantir stands today before we explore the analyst’s argument.
Where the most richly priced growth stock on the market stands
Among big companies, Palantir is the one you have to pay the most for, by far. Analysts who have been ringing the bell on an AI bubble expect Palantir to be the first domino to fall, even ahead of Nvidia (NASDAQ:NVDA). That’s because, unlike Nvidia, the stock price is far ahead of the earnings curve.
Buying PLTR stock at ~$180 today means you’re paying for results over a decade in advance.
PLTR stock trades at almost 180 times forward earnings. Even on a free cash flow basis, you’re paying in excess of 130 times FCF. In comparison, NVDA stock trades at 25 times forward earnings with stronger and more durable sales growth. A software company like Palantir is not in the intersection of the AI infrastructure buildout and mostly relies on an increasing number of customers.
The company can scale once it gets its foot in the door, but there’s only so much market it can capture. Analysts thus expect sales growth to come down a notch from ~54% for all of 2025 to ~42% in 2026. EPS growth is also expected to come down from 77% to less than 40% this year.
In short, you may not be getting your money’s worth.
Why bulls are still persistent
The idea is that AI will be rapidly adopted across U.S. commercial companies, with Palantir being the “default” enterprise AI platform. This may allow it to grow much faster than expected, with Wall Street slapping an even higher premium. And the idea does have some meat to it. If the market was comfortable paying over 200 times forward earnings, 400, or even 500, may not look too ridiculous until the music stops.
The most well-known analyst pushing this is Dan Ives from Wedbush, who believes Palantir can be a $1 trillion company within “two to three years”. He has advised investors to “triple down” on the stock. A lesser-known analyst, Will McGough from Prime Capital, also believes PLTR can reach a $1 trillion market cap.
Can Palantir double this year?
The likelihood of PLTR stock doubling in 2026 is minuscule. If the AI rally accelerates this year, PLTR Palantir can cross $200 again, and perhaps $250, but even with blockbuster earnings and an unceasing rally, doubling the market cap from here is unrealistic.
The stock has been losing momentum, so a $1 trillion valuation in even two years is extremely unlikely at this point. Software AI stocks are seeing maturing valuations, and the market is likely to let the earnings catch up to the sky-high valuations first before slapping a bigger premium.
The worst-case scenario would be if the AI rally ends this year. There’s plenty of profit to be taken, and the market will hurriedly punish the stock, especially if Palantir cannot sustain the beat-and-raise cadence for dozens of quarters as expected.
All things considered, it is much safer to buy AI hardware stocks. For software AI, Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) remains my top bet.
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