Palantir Technologies’ stock experienced significant gains in Monday’s trading session, closing with an increase of 4.6%, and at one point, rising as high as 9.9% earlier in the day. In contrast, the S&P 500 and Nasdaq Composite posted smaller gains, closing up 0.7% and 0.6% respectively.
The overall market saw upward movement following the announcement that mobile devices, computers, and other electronics would be temporarily exempt from the Trump administration’s reciprocal tariffs. Palantir benefited from this positive market momentum. Additionally, the company’s stock received a boost from the announcement that NATO had chosen to implement Palantir’s Maven Smart System, an artificial intelligence platform, for military applications.
In 2025, despite substantial volatility in the stock market, Palantir’s shares have shown sizeable growth. The company’s stock price has increased about 22.5% so far this year. This surge has elevated the software company’s valuation multiples to levels that are even more reliant on growth. Currently, Palantir is trading at approximately 166 times this year’s projected earnings and 57 times projected sales.
Given these elevated valuation multiples, which are high compared to other high-growth software companies, investors who are cautious about risk and market volatility may opt to avoid the stock. While Palantir is acknowledged as a strong company, its current valuation may not appeal to all investors.
However, it is suggested that investors who purchase Palantir stock now and hold it over the next five years could experience returns that surpass the broader market. Although some significant growth is already reflected in the company’s valuation, Palantir has demonstrated strong margins and possesses significant potential for long-term growth. The recent NATO contract win is considered a positive indicator of the company’s future prospects.
Keith Noonan, the original article’s author, has no financial interests in the stocks mentioned, while The Motley Fool holds positions in and recommends Palantir Technologies, as outlined in their disclosure policy.
