Palantir (PLTR) has been one of Wall Street’s standout performers over the past year, strong enough that institutional investors have overtaken retail traders as the dominant holders of the stock.
Institutional ownership of Palantir shares has climbed to roughly 60%, up from just over 50% in recent months, according to data from Fintel.io.
That’s a positive sign while the AI narrative remains strong, but it leaves Palantir exposed if investors begin to doubt that its valuation growth is supported by adoption trends or the underlying business.
Valuation remains a sticking point for Mizuho, which reiterated its “Neutral” rating on the stock with a $165 price target — about 9% below current levels.
“Palantir’s recent execution has been stunning, with material upward revisions across both Commercial and Government,” the analysts wrote.
Still, they cautioned that “the stock’s multiples remain extreme, dramatically above anything else in software” — including a forward multiple of 105 times projected 2025 enterprise value-to-sales.
This was a major sticking point for market analyst Cantonese Cat, who quipped: “When are institutions going to realize that this stock is overvalued?”
Valuations and strength
Palantir’s core strength lies in its ability to tailor AI-driven analytics for clients, helping them organize and interpret massive amounts of data.
Its Foundry platform is widely used by corporations to manage and analyze critical data sets. At the same time, Gotham serves as the company’s government-facing platform, primarily supporting defense, intelligence, and national security agencies.
While Palantir has expanded into commercial markets, it remains closely associated with its government work. According to USASpending.gov, the company has secured over 130 federal contracts, spanning defense, intelligence, and civilian agencies.
As Investors Observer noted, this government footprint lends Palantir the aura of being “recession-proof.” At the same time, it has drawn sharp criticism from civil liberties groups, which argue the firm plays an outsized role in what they call the “American surveillance state.”
For these reasons, many analysts believe Palantir could continue to defy valuation concerns and climb higher. Futurum Group CEO Daniel Newman, for example, said he expects Palantir to be “the next trillion-dollar market cap company on fundamentals.”
That would mean a long runway ahead: Palantir’s current market capitalization is about $433 billion, a fraction of the $1 trillion milestone.
Reaching that level would place Palantir in rare company — just 11 firms worldwide currently hold valuations above $1 trillion, according to industry data.
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