Palantir’s 135x Valuation Is Justified By Hypergrowth; Unmatched

Headed for $160 per share by summer 2026. I believe Palantir’s 35%+ growth, 50% FCF margins, and zero debt justify its premium multiple.

Investment Thesis

Palantir (PLTR) had been rallying hard into earnings, as investors wanted to buy the news. But the other side of buying the news events is the sell-the-news event, which is what happened, after hours, with the stock down 10%. This is normal. And I believe that in the next 30 days, this short-term bleep, will be forgotten.

Indeed, my advice to subscribers is always the same: don't play the short-term game of playing earnings and looking to the market for direction for what to do. If you spend your time looking to the market for direction, you are going to trail behind the market.

I recognize that the stock is expensive at 135x forward free cash flow, but I argue that it's worth it.

In short, Palantir is delivering massive growth at scale. I simply don't know of too many businesses that are delivering more than $1 billion of revenues in 90 days and are expected to grow at more than 30% y/y. And Palantir? It's expected to deliver more than 35% y/y revenue growth all the way into the back end of this year.

I continue to believe, as I've done for a while, that PLTR is headed for $160 per share by summer 2026. The upside here is strong. Buy this stock.

Important Context

Palantir is a stock that has year-to-date been the best performer in the S&P500. My reasoning for recommending PLTR to you hasn't changed. This is what I wrote last time, on 23 April 2025:

Recall, I recommended PLTR on 2 February 2025.

Data by YCharts

Since my recommendation about 90 days ago, the stock has been down a lot and it's gone on to outperform the Nasdaq, so that since I made this recommendation, the stock is practically unchanged and has been an outperformer in this tough market.

Naturally, as I've said on many occasions, had I used a stop loss on my stocks I would be out of this name at a loss. I would have bought high and sold low, into fear. Not for me. That's not how you outperform.