Should you invest in Palantir in 2025? This is a question many UK investors are asking, given the meteoric rise of this big data and artificial intelligence company. Listed on the stock market in 2020, Palantir’s share price has surged dramatically in recent years, to the point where some believe it is already overvalued…
With its high valuation, government contracts and unique positioning in AI, the American firm fascinates as much as it concerns. This article breaks down its key figures, areas of controversy, and what you need to know to make an informed investment decision.
See also: 12 undervalued stocks with strong potential.
Palantir on the stock market: a meteoric rise
“We don’t sell software. We sell institutions strengthened by data.”
Palantir is not your typical tech company. It develops highly sophisticated data analytics platforms for governments, defence agencies and large corporations. Its two flagship products? Gotham, used by intelligence services and law enforcement, and Foundry, aimed at private businesses and civil institutions.
After years of operating at a loss, Palantir reached profitability in 2023. Its revenue relies heavily on long-term – and sometimes confidential – contracts with government clients. This dependence reassures some investors… while worrying others.
Palantir key financial indicators as of late July 2025:
| 📊 Indicator | 💵 Estimated value |
| Share price | ~$28 |
| Market capitalisation | ~$60bn |
| 2025 P/E ratio | ~70x |
| 2024 net profit margin | 14% |
| Revenue growth (YoY) | +17% |
Key takeaway: growth is real, profitability has been achieved, but the valuation remains stretched.
💡 Good to know
- ✅ Nearly 55% of revenue comes from government contracts.
- ✅ The company has raised its forecasts twice in 2025.
- ✅ Its valuation places it among the most expensive stocks on Wall Street.
- ✅ Over three years, the share price has risen more than +600%, driven by AI and public sector contracts.
- ✅ The company is now worth around $379bn, compared with seven times less in 2022.
Is Palantir overvalued compared with Nvidia?
Despite strong results, Palantir’s valuation is a matter of debate. With almost 200 times the forecast earnings for the next 12 months, Palantir shares are very expensive, ranking among the priciest on the US market. For comparison, an AI giant like Nvidia trades at around 35 times future profits. This huge premium for Palantir reflects high expectations but also raises concerns among analysts.
In short, Palantir is priced for perfection: to justify its current share price, the company will need to sustain exceptional growth for many years to come.
Palantir vs Nvidia share comparison (August 2025)
| 📊 Indicator | 💵 Palantir | 📈 Nvidia |
| Share price | ~$28 | ~$125 |
| Market value | ~$60bn | ~$3tn |
| Revenue growth (2024→2025) | +17% | +50% |
| Net profit margin | 14% | 54% |
| Earnings multiple | ~70× | ~35× |
💡 Key takeaway
Palantir remains far smaller than Nvidia, but its shares are already very expensive relative to earnings. Nvidia, by contrast, has higher growth and profitability, while being less “overpaid” by traditional standards. Betting on Palantir means betting on exceptional future growth.
Despite what some consider an excessive valuation, Palantir remains one of the most popular stocks on trading platforms. Its positioning at the crossroads of AI, defence and big data attracts many long-term investors.
Supporters argue that the company has unique strengths in data analytics and AI that could sustain double-digit growth over the next decade. From this perspective, traditional valuation metrics (like the P/E ratio) are seen as less relevant for such an atypical player.
Pro-Palantir arguments
- ✅ Unique positioning at the intersection of AI, big data and defence
- ✅ Technology is hard to replace once integrated
- ✅ Very high entry barriers in its markets
- ✅ Potential for double-digit growth over the next decade
- ✅ Traditional stock market ratios seen as less relevant for a unique business model
- ✅ Often compared to the early days of Amazon or Tesla, both long considered “overvalued”
Anti-Palantir arguments
- ⚠️ Very high stock market valuation (nearly 200× forecast earnings)
- ⚠️ Heavy reliance on government contracts (over 50% of revenue)
- ⚠️ Exposure to public budget cycles and political decisions
- ⚠️ Smaller addressable market compared with other tech giants
- ⚠️ History of significant share price volatility
- ⚠️ Future growth uncertain if the AI wave slows
A controversial image among some investors
This is one of the most divisive points about Palantir. The company has been accused of contributing to forms of mass surveillance, and its founder, Peter Thiel, is often criticised for his political views.
NGOs such as Privacy International have voiced concerns, while some ESG* funds have excluded the stock from their portfolios.
*ESG criteria refer to Environmental, Social and Governance factors considered by some investors.
“Investing in Palantir means betting on a world where states want ever greater control. That’s not a neutral choice.”
For investors, this raises a simple question: am I comfortable aligning my capital with this type of business model?
At the same time, the company is seeking to broaden its image by accelerating in the private sector. Its Foundry platform already equips industrial, financial and pharmaceutical groups to optimise their data and integrate AI. This fast-growing diversification is based on an unusual model: a hybrid service between software and tailored support, with engineers deployed directly to client sites. This approach strengthens entry barriers and makes Palantir hard to dislodge once embedded, but it also limits its ability to target a mass market.
Should you buy Palantir today?
There is no one-size-fits-all answer. If you believe in the growing power of predictive analytics tools in government-critical sectors, Palantir has a unique positioning. But you must accept an element of speculation: buying an expensive stock, highly exposed to political choices and ethical debates.
Tip: if you invest, do so with discernment. Palantir can have a place in a diversified portfolio, but it’s unlikely to be the sole tech conviction holding.
