Peter Thiel just wrote a $3 million check to fight California’s wealth tax proposal. That’s his largest political donation in years – and it tells you everything about Palantir Technologies (NASDAQ:PLTR | PLTR Price Prediction) at these prices.
When a billionaire founder fights this hard to avoid forced liquidation, he’s either protecting a position he can’t sell or one he won’t sell. At 384x trailing earnings and 101x sales, PLTR trades like a company insiders believe will justify these multiples. The wealth tax fight suggests Thiel agrees, but also reveals the fragility of that conviction.
The Valuation Reality Check
Zacks recently asked whether Micron Technology Inc (NASDAQ:MU) or Palantir is the better AI buy for 2026. That comparison alone should raise eyebrows. Micron trades at 37x earnings and 10x sales while generating $8.54 billion in annual net income on $42.31 billion in revenue. Palantir generates $476 million quarterly on $1.18 billion in sales.
When your software company gets compared to a cyclical semiconductor manufacturer, the market is signaling something about valuation. We explored similar AI valuation concerns in today’s Daily Profit newsletter, examining how investor sentiment around tech stocks is shifting. Micron’s 22.6% return on equity and 56% gross margins in its latest quarter are real. Palantir’s 384x P/E assumes a future that hasn’t arrived.
The Insider Selling Pattern
While Thiel doesn’t appear in recent insider transaction filings, other executives have been aggressive sellers. CEO Alex Karp liquidated over $60 million worth of shares in November 2025 at prices ranging from $155 to $173. Director Stephen Cohen sold a similar amount. Ryan Taylor and Alexander Moore have been consistent sellers through January 2026, with Moore dumping shares at $206 in early November and again at $168-$181 in January.
The stock closed at $165.96 on January 22, 2026, down 14.5% over the past month and 6.6% year to date. That’s after a 115.9% gain over the past year. Reddit sentiment remains stubbornly bullish, with r/wallstreetbets driving retail enthusiasm even as insiders exit.
The Bull Case Requires Faith
Palantir’s 62.8% year-over-year revenue growth and 33.3% operating margins are impressive. The company beat earnings estimates by 23.5% in Q3 2025, reporting $0.21 per share versus $0.17 expected. Its AI platform for government and enterprise clients has real traction, and government contracts provide sticky, high-margin revenue.
But the forward P/E of 169x still prices in extraordinary outcomes. The company needs to sustain 60%+ revenue growth for years to justify current levels. That’s possible if AI adoption accelerates and Palantir captures disproportionate share. It’s also the kind of assumption that makes billionaire founders fight wealth taxes.
What the Tax Fight Tells You
Thiel’s $3 million donation isn’t about policy philosophy. It’s about preserving a multi-billion-dollar stake without forced selling. If he believed PLTR was overvalued, he’d welcome the liquidity event. Instead, he’s fighting to maintain optionality, suggesting he thinks the stock goes higher or that selling now would be a mistake.
That’s not the same as saying PLTR is cheap. It’s saying the founder can’t afford to sell and doesn’t want to be forced into it. At 384x earnings, you’re not buying Palantir’s present. You’re buying Thiel’s belief in its future and his ability to avoid selling it.
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