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Palantir Technologies (PLTR) is having its moment, surging 24% to $103.83 after a blowout Q4 earnings report. With AI dominance, government contracts, and a bullish revenue forecast in play, the big question for traders and investors alike: Is this just the beginning, or has Palantir already priced in its upside?
 

The Catalysts: What’s Driving the Rally?

 

1. Strong Q4 Performance

   • Earnings per share: $0.14, up 75% YoY
   • Revenue: $828M, a 36% jump
   • U.S. Commercial Revenue: +64%
   • U.S. Government Revenue: +45%

   Palantir’s ability to expand both its government and commercial segments underscores its strategic positioning as a major AI and data analytics provider.

2. AI Expansion and Government Contracts

   • Palantir’s Artificial Intelligence Platform (AIP) is driving adoption across industries.
   • Government partnerships continue to be a goldmine, as the company secures more defense and intelligence contracts.
   • The AI arms race means demand for Palantir’s software could keep accelerating—a long-term macro tailwind.

3. Upgraded Outlook for 2025

   • Palantir raised its full-year revenue forecast to $3.76B, beating Wall Street estimates by $240M.
   • Morgan Stanley upgraded the stock from “Underweight” to “Equal Weight”, increasing its target from $60 to $95.

   Wall Street’s shift in sentiment is notable. Many firms were skeptical about Palantir’s profitability and government dependence, but AI’s rapid commercialization is changing that perception.

 

Is PLTR Still a Buy at These Levels?

The stock has skyrocketed, but the macro case for AI infrastructure and data analytics remains strong. However, at 103.83, Palantir isn’t cheap. The valuation is rich, trading at a forward P/E over 70, meaning the market is already pricing in strong growth.
 

• Bullish case: If AI adoption continues accelerating, Palantir’s dominance in government and commercial contracts could justify even higher prices.
• Bearish case: The valuation risk is real. Any slowdown in government spending, competition from new AI players, or a tech selloff could send PLTR lower.

 

The Trade Setup: How to Play It?

• For long-term investors: Consider LEAPS (long-term call options, e.g., Jan 2026 $120 calls) if you believe in Palantir’s AI dominance.
• For short-term traders: The stock is overbought in the near term, so a pullback could offer a better entry point. Look for a retracement to $95-$100 for a possible re-entry.

Final Thoughts

Palantir is making a massive push in AI, and the market is rewarding it. But at these prices, expect volatility. AI is a macro megatrend, and Palantir is one of the best-positioned players—but chasing at overbought levels comes with risks.

What’s your play? Buying into the AI revolution, or waiting for a better entry?