Palantir’s Valuation Debate Intensifies as Shares Pause Record Run

Palantir US69608A1088

Following a phenomenal year of gains, Palantir Technologies' stock momentum has stalled as the calendar year draws to a close. This pause comes despite the company's operational business accelerating, fueled by significant new government contracts. A fundamental debate is now raging among investors: does the firm's explosive growth justify its premium valuation, or are bears correct in anticipating a substantial correction?

Volatility in the share price contrasts sharply with consistent operational execution. Palantir recently confirmed a major expansion of its partnership with the U.S. Navy, involving a contract worth up to $448 million. This agreement centers on implementing the AI-powered "Ship OS" platform, designed to modernize maritime logistics and maintenance.

Progress in the crucial commercial sector, key to the company's diversification, is also evident. Surf Air Mobility has committed $26 million to develop an operating system based on Palantir's foundational software. Furthermore, the company has extended its collaboration with France's DGSI intelligence agency by three years, reinforcing its strong position within the European defense sector.

The Bull vs. Bear Divide

The data analytics specialist has become a focal point for sharply opposing market views. With a market capitalization of approximately $431 billion and a price-to-earnings (P/E) ratio exceeding 430, the equity is priced for perfection. These metrics have attracted prominent skeptics; reports indicate that "Big Short" investor Michael Burry holds put options, positioning for a potential decline in the stock price.

This pessimism is countered by bullish analysts. Wedbush strategist Dan Ives views the recent pullback from all-time highs as a consolidation phase. He has issued a price target of $230 per share, arguing that Palantir is on a path to reach a $1 trillion valuation within the next two to three years.

Financials Fueling the Optimism

The bullish thesis is heavily supported by the company's latest financial results for the third quarter of 2025, which demonstrated a dramatic acceleration:

• Revenue Surge: Total revenue climbed 63% year-over-year to $1.18 billion.
• U.S. Commercial Explosion: Business with commercial customers in the United States skyrocketed, posting growth of 121%.
• Future Pipeline: The total contract value (TCV) soared by 342%, signaling robust future revenue streams.

Technical Levels in Focus

As the market transitions toward 2026, investor attention is shifting to the stock's technical posture. Currently trading around the $180 level, the shares are seeking stabilization. The 50-day moving average, near $158, represents a critical support zone. Market technicians suggest that as long as this area holds, the technical setup remains favorable for a potential move toward the $230 analyst target. However, given the elevated valuation, the margin for any operational disappointment is exceptionally thin.