Palantir (PLTR) has seen a huge rally driven by AI in 2025, and its latest news has investors buzzing. The tech giant is already known for its close ties to government and growing commercial footprint, but this time it has just announced a new partnership with TWG AI after a highly successful multi-demo customer event that drew praise from Wedbush.
The partnership follows a recent Palantir customer conference where more than 30 AI demos were shown to customers, and analysts were “surprised by the breadth” of Palantir’s use cases. Besides TWG, Palantir has made a few notable deals. It announced an expanded partnership with Nvidia (NVDA) for the use of AI chips and tools, and even received a directive from the US military allowing it to use its Vantage platform across all commands and organizations.
In other words, we can say that Palantir is aggressively expanding the footprint of AI in finance. So investors would be wondering: is there still upside potential ahead, or is the stock already priced to perfection? Let’s find out the answers.
Founded in 2003, Palantir is an AI software company whose platforms, like Foundry and its new AIP, help governments and businesses make sense of complex data. Once focused on national security, Palantir now serves finance, healthcare, defense and more, transforming siled data into real-time intelligence. Its products are used by U.S. agencies as well as banks, insurers and others to automate workflows and decisions.
Valued at approximately $435 billion by market cap, PLTR shares have surged approximately 140% year to date (YTD). It reached an all-time high of $207 in early November. This rally has been fueled by soaring earnings and AI optimism, even outpacing Nvidia’s gains. However, after hitting that high, the stock fell 12% to around $182, roughly where it trades today, due to internal pressures and valuation concerns. In short, PLTR went from high value earlier this year to trading near record highs as investors anticipated rapid growth.
Nothing is new in Palantir’s valuation; it’s rich. It trades at around 320 times current P/E, compared to around 24 times for the technology sector, and its EV/sales is in the range of 100 times compared to the sector median of 4x. It appears that virtually all of the potential big gains appear to be already priced into PLTR stock. These dizzying multiples suggest that most investors are counting on continued explosive growth driven by AI, so the bar for disappointment is very high.
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Palantir established its new collaboration with TWG Global based on the principle of applying its AI software to financial services. TWG is an investment company focused on implementing AI in a complex industry such as banking. The agreement solidifies a partnership targeting the application of the Palantir AIP platform to transform large banks and insurers’ processes such as underwriting, trading and risk management. Theoretically, this is a good solution; By integrating Palantir’s technology with TWG’s industry contacts, it would allow the company to open up a significant new customer base. Many analysts considered it another signal that the Palantir ecosystem is growing: as has been reported, three giants, the cutting-edge xAI models, the proven data platform of Palantir and the execution power of TWG are joining forces.
However, investors are advised not to place too much importance on this collaboration at the moment. Large collaborations are usually not immediately rewarding. Integration has been a problem in Palantir’s former consortia and even in Musk’s xAI or Nvidia. Still, despite all the hype, some analysts worry about the existence of an “AI bubble,” and even renowned investor Michael Burry recently bet that Palantir was bearish, meaning betting against the stock.
The TWG alliance is therefore interesting news; it is not a short-term source of income but a long-term project. At least for now, this is more of a vote of confidence in Palantir’s strategy, although investors can see whether it will lead to real contracts and increased profits.
Palantir’s third-quarter profits were nothing short of explosive. The company easily beat analyst estimates for revenue and bottom line and posted immense growth, fueled by increasing demand from its government and commercial customers.
The company reported revenue of $1.18 billion, up 63% year-over-year (YoY) and well above Wall Street expectations. Growth was strong across the board: commercial sales jumped 73% to $548 million, U.S. revenue jumped 77% to $883 million, and profitability hit new highs.
GAAP net income jumped to $476 million, up from $144 million last year, while EPS came in at $0.18, crushing the $0.12 analysts were looking for. Cash generation was equally impressive, with $508 million in operating cash flow and $540 million in free cash flow, bringing Palantir’s cash balance to $6.4 billion.
Management has increased guidance at all levels. For the fourth quarter, Palantir is now forecasting revenue between $1.327 billion and $1.331 billion, representing growth of approximately 60%, and full-year revenue is expected to be between $4.396 billion and $4.40 billion, well above previous estimates. CEO Alex Karp even said it was “arguably the best a software company has ever offered,” and based on the numbers, he’s not exaggerating (at least not too much).
Wall Street is generally positive but cautious on PLTR stock. Dan Ives of Wedbush remains optimistic; it retained an “Outperform” rating and raised its 12-month target to $230, citing Palantir’s growing AI-driven growth.
Morgan Stanley has an “equal weight” rating with a target of $205, and Goldman Sachs has a target of $188. These analysts note that the beat and raise quarter was impressive, but they also point to PLTR’s dizzying multiples and the need for continued execution. In short, analysts see great long-term potential but recognize that Palantir must deliver on its big promises.
Overall, Wall Street has a consensus rating of “Hold” on PLTR, with a 12-month average price target of $191.7, implying a 6% upside from current levels.
In my opinion, Palantir continues to exhibit strong fundamentals and widen its moat with partnerships like TWG, but the stock now trades like everything is fine. Much of the good news is already integrated into the courses. Despite this, the stock continues to reach new heights thanks to its momentum and growth story. If you can digest the valuation, PLTR could still be a long-term buy.
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As of the date of publication, Nauman Khan did not have (directly or indirectly) any position in any of the securities mentioned in this article. All information and data contained in this article are for informational purposes only. This article was originally published on Barchart.com
