Down 30% in the Past Month, Is Now a Good Time to Buy the Dip in Palantir Stock?

Palantir Technologies (PLTR) has seen a dramatic share-price decline by roughly 30% in the past month, reversing its initial 2025 spike. It was among the most notable gainers in 2024 with a return of 341% because investors were upbeat about its artificial intelligence (AI) strengths and rising government contracts. Sentiment on PLTR turned negative in recent weeks because of overall macroeconomic concerns like rising interest rates, trade tensions, and potential decreases in U.S. federal spending.

Even with its sound fundamentals, Palantir’s valuation has come under criticism, with its valuation multiples far above its industry peers. Now investors are debating whether this pullback presents an attractive entry point for the long-term AI leader or if further downside risk is present.

About Palantir Stock

Palantir Technologies (PLTR) is an AI-driven and software-based big data analytics company that specializes in big data solutions for government agencies, organizations in the financial services sector, and healthcare organizations. It is headquartered in Denver, Colorado, and it has established itself with its extremely advanced intelligence and analytics platforms. Palantir Gotham and Palantir Foundry are its flagship offerings, which are used by both the government and private sector customers for predictive analytics, security, and operational intelligence.

Palantir stocks have been extremely volatile during 2025 with the 52-week trading price ranging from $20.33 to $125.41. It peaked in early February 2025 at over $120 only to decline by 30% in the last month to its current price near $85. While it fell, Palantir is still 266% higher in the past year, beating the S&P 500 Index’s ($SPX) 10% gain in the same period.

One concern for investors is Palantir’s valuation. It trades at a price-earnings ratio of 244.6x on the basis of its future earnings, which is far above other enterprise software stocks. Its price-sales ratio at 65.2x and price-book ratio at 36.6x also suggest that investors have paid a premium for its growth prospects with the utilization of artificial intelligence. While the government contracts and commercial expansion of Palantir provide tailwinds for the long run, the rich valuation is worrisome, especially in the backdrop of an increasing interest rate environment.

Palantir Stock Beats Earnings, Revenue Estimates

Palantir posted Q4 2024 earnings per share of $0.03 and adjusted earnings of $0.14, above estimates for $0.11.

Quarterly revenue rose 36% year-over-year to $828 million, topping estimates. Revenue in the U.S. rose 52% year-over-year to $558 million, with commercial revenue in the U.S. rising 64% year-over-year to $214 million. U.S. government revenue rose 45% year-over-year to $343 million, illustrating Palantir’s success at winning federal contracts.

Palantir’s Q4 free cash flow was $517 million with a 63% margin, and its cash from operations was $460 million with a 56% margin. It also reported GAAP net income of $79 million with a 10% margin and adjusted net income of $341.9 million after deducting the cost of stock-based compensation.

Looking ahead, Palantir projects first quarter 2025 revenue to be $858 million to $862 million, or year-over-year growth of 30%, with $354 million to $358 million in adjusted operating income. Full-year 2025 revenue is expected to be $3.741 billion to $3.757 billion, or growth at a rate of 31%, with $1.5 billion to $1.7 billion in expected adjusted free cash flow.

What Do Analysts Anticipate for Palantir Stock?

Palantir is covered by 19 analysts who have a consensus “Hold” recommendation and an average recommendation level of 2.84, which is an improvement from 2.53 three months earlier. This improvement in sentiment is attributed to the growth in enterprise and government contracts for the company, but valuation worries and macroeconomic headwinds remain. There are highly polarized analyst opinions regarding Palantir. 

The mean price target for Palantir stands at $85.11, slightly below its current trading price. 

However, the price targets are highly dispersed, mirroring the doubt regarding the valuation and the sustainability of the growth at Palantir. While the highest price target is $141, representing 65% upside, the lowest price target is $18, representing 78% downside.