Data analytics firm Palantir Technologies Inc. (NASDAQ:PLTR) used to be a regular feature on Jim Cramer’s radar in 2025. The CNBC TV host praised the firm with no end as he remained optimistic about its ability to help businesses reduce costs and also play a role in the Trump administration’s cost cutting efforts. Cramer also wagered on multiple occasions that the shares would first cross the $100 point and then $150. After they did, he reminded listeners about his success multiple times as well. Now, after interviewing CEO Alex Karp, Cramer once again set a price target for Palantir Technologies Inc. (NASDAQ:PLTR) in a tweet:
“@Palantir , i am sticking by my $250 target, @Alex Karp”
For Palantir Technologies Inc., the debate is about whether the firm’s growth can match the valuation. In 2025, a key concern for the firm was whether its penetration in the private sector would equal the role that it plays in the public sector. On the valuation front, Palantir Technologies Inc. trades at a forward P/E multiple of 78 even though the shares are flat over the past year.
Despite the share price weakness, the firm has managed to grow. Palantir Technologies Inc.’s second quarter earnings saw its revenue, operating income and net income grow by 93%, 47% and 225%. Additionally, US Commercial Revenue, US Government Revenue, International Commercial Revenue and International Government revenue grow by 149%, 90%, 26% and 42%, respectively. Additionally, the firm’s Rule of 40, which measures revenue growth rate and profitability, touched 155%, which is quite high for a metric that is considered strong at 40% or above. Additionally, Palantir Technologies Inc.’s net dollar retention sat at 157%, which meant that existing customers were spending 57% more than last year.
A key component in Palantir Technologies Inc.’s debate is the firm’s Artificial Intelligence Platform (AIP) bootcamp, which offers businesses the opportunity to leverage in-house data to build AI platforms in one to five days. While the bootcamp did contribute to US growth, the weaker international growth did leave room for more. Not to mention, Michael Burry of Big Short fame has pointed out that Palantir Technologies Inc.’s accounts receivable grew to $1.49 billion in Q2 and 27% of the receivables were from a single customer. Burry also believes that the firm’s deferred revenue to revenue ratio is low compared to SaaS peers.
Palantir Technologies Inc.’s forward P/E ratio is quite high compared to ServiceNow’s 27.25. Looking at hedge fund interest, 86 funds held a stake in Q2, which marked a drop from the 96 in Q1, according to Insider Monkey’s data. Short interest as a percentage of float is 3%, which is similar to ServiceNow. Notable Q2 hedge fund exits included Two Sigma Advisors, Bridgewater Associates and Point72 Asset Management.
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