We recently published a list of 12 Best Multibagger Stocks to Buy in 2025. In this article, we are going to take a look at where Palantir Technologies Inc. (NASDAQ:PLTR) stands against other best multibagger stocks to buy in 2025.

In the world of investing, the term “multibagger” refers to stocks that have the potential to deliver returns several times greater than the original investment. One key factor that can help identify potential multibaggers is momentum. Momentum investing focuses on capitalizing on the continuation of existing market trends. Investors using this strategy look for stocks that are experiencing upward price movements, often driven by strong earnings reports, positive news, industry tailwinds, or overall market sentiment. The idea is simple: “the trend is your friend,” and momentum can be a powerful force in identifying winners before they peak. The importance of momentum has been recognized by famous investors, but many of them emphasized the idea that it is crucial to catch momentum stocks early on. As Warren Buffett put it – “What the wise do in the beginning, fools do in the end”.

READ ALSO: 12 Best Multibagger Penny Stocks to Buy Now

The US market is close to entering a correction mode as the absolute magnitude of decline since the mid-February peak is approaching 10%. The current policies of the new US administration, such as tariffs, federal jobs cuts and cuts in some large-scale public projects, are causing havoc among investors as many are fearing a scenario in which the US economy enters stagflation – a period of high inflation among weak economic growth and unemployment. Some analysts have pointed out that sectors reliant on government contracts, such as infrastructure and defense, are already experiencing heightened volatility as a result of these policy shifts. In a recent interview with Maria Bartiromo on Fox News, the President himself refused to rule out a recession in the current year and claimed that the economy is in “a period of transition” and that tariffs might fuel inflation at some point. With consumer confidence showing early signs of weakening, as signaled by recent business surveys, some economists argue that the Federal Reserve may be forced to intervene sooner than expected to stabilize the markets. This idea was already supported by the President, who at some point expressed the opinion that interest rates in the US economy are higher than they should be.

The aforementioned developments have caused a market selloff, particularly in previously high-momentum stocks such as the Magnificent 8, which have benefited from the AI megatrend and were responsible for most of the market returns last year. Prior to that, many previously well-performing stocks, such as government contractors, had already lost their momentum following the election results, while some of the few well-performing healthcare stocks were hit by Medicare/Medicaid reimbursement threats. Likewise, the energy sector remained somewhat out of favor – despite volume tailwinds from Trump 2.0, the expectation of lower oil prices amid a weaker economy has put downward pressure on stock prices in the sector. The key takeaway for investors is that one should look for multibaggers that haven’t yet lost their momentum during the market dip in the last month. These are often lower-capitalization companies that are underfollowed by analysts and operate in high-growth markets.

Our Methodology

To compile our list of multibagger stocks, we used Finviz to filter the companies that have delivered at least 200% stock price return in the last twelve months. Then we compare the list with our proprietary database of hedge funds ownership as of Q4 2024 and include in the article the top 12 names with the highest number of hedge funds that own the stock.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Palantir Technologies Inc. (NASDAQ:PLTR)

Number of Hedge Fund Holders: 64

Stock Price Return in the last twelve months: 216%

Palantir Technologies Inc. (NASDAQ:PLTR) is a data analytics company that develops software platforms for data integration, analysis, and decision-making. Its products, Palantir Foundry and Palantir Gotham, are used by organizations in sectors such as government, healthcare, finance, and energy to manage, analyze, and derive insights from large, complex datasets. PLTR’s technology supports a wide range of applications, including national security, fraud detection, and supply chain optimization. The company focuses on providing solutions that help clients make data-driven decisions and improve operational efficiency. The US-based company ranked sixth on our recent list of 10 Best Growth Stocks Under $100 to Buy Now.

Palantir Technologies Inc. (NASDAQ:PLTR) posted impressive Q4 2024 results, with revenue rising 36% YoY and 14% sequentially to $828 million. The company’s US business showed exceptional performance, with US commercial revenue growing 64% YoY and US government revenue increasing 45% YoY in Q4. PLTR secured a record number of deals during the quarter, including 32 deals valued at $10 million or more, with a total TCV of $1.8 billion, marking a 56% YoY increase. The company’s AI Platform (AIP) continues to be a key driver of new customer acquisition, with PLTR now having almost five times the number of US commercial customers compared to three years ago.

Palantir Technologies Inc. (NASDAQ:PLTR) reported robust profitability, with an adjusted operating margin of 45%, the highest in the company’s history, and a Rule of 40 score rising to 81 in Q4. Looking ahead, management is projecting a full-year 2025 revenue midpoint of $3.749 billion, reflecting a 31% YoY growth rate. The company’s success is largely attributed to its Ontology-based approach to AI implementation, which enables organizations to seamlessly incorporate LLMs into their operations. With a 216% stock price return over the last twelve months, PLTR is one of the best multibagger stocks to buy in 2025.

Overall, PLTR ranks 2nd on our list of best multibagger stocks to buy in 2025. While we acknowledge the potential of PLTR as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PLTR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.