TLDR
- Palantir stock surged 106% in 2025 but dropped 18% after Andrew Left’s valuation warning
- Stock trades at 240x forward P/E, making it S&P 500’s most expensive name
- Wall Street analysts overwhelmingly bearish with only 7 of 29 recommending buy
- Databricks poses competitive threat with $100B valuation in private markets
- Revenue grew 48% with 93% jump in U.S. commercial sales last quarter
Palantir stock has become the poster child for the divide between retail enthusiasm and Wall Street caution. The AI data company gained over 106% this year before reality started setting in.
Andrew Left’s August warning on Fox Business proved prescient. The veteran short-seller called Palantir’s valuation “so absurd” and predicted a 50% correction. Since then, shares have tumbled 18%.
The stock remains the seventh-most owned on Robinhood despite sitting outside the top 25 U.S. companies by market cap. This retail backing pushed the stock to levels that defy traditional valuation metrics.
Left wasn’t making empty threats. His track record includes calling Valeant the “pharmaceutical Enron” in 2015. When he speaks about overvalued stocks, markets tend to listen eventually.
Extreme Valuation Metrics
The numbers tell the story Wall Street has been trying to communicate. Palantir trades at roughly 240 times forward earnings and 90 times sales.
This makes it the most expensive stock in the entire S&P 500. Even Tesla at its peak didn’t reach these valuation levels.
Wall Street expects strong growth. Analysts model 35% revenue increases for both 2026 and 2027. But even those optimistic projections can’t justify current prices.
Only seven of 29 analysts rate the stock a buy. The average price target of $154.47 suggests minimal upside of just 0.89% from recent levels.
The lowest Wall Street price target sits 70% below current trading levels. This reflects the professional community’s belief that a major correction is inevitable.
Databricks Competition Emerges
Left has shifted from pure short-selling to finding long opportunities. His current focus is Databricks, the $100 billion cloud data intelligence company.
He argues Databricks grows faster than Palantir, operates a true SaaS model, and doesn’t depend on government contracts. The comparison is damaging to Palantir’s investment thesis.
Left’s math is straightforward. If Databricks deserves $100 billion, then Palantir should trade around $40. That represents a 75% decline from current levels.
Databricks remains private with no immediate IPO plans. But its existence as a well-funded competitor undermines Palantir’s premium valuation.
Strong Fundamentals Can’t Save Stock
Palantir’s operational performance remains solid. Revenue grew 48% last quarter with U.S. commercial sales jumping 93%.
The company’s Artificial Intelligence Platform has driven much of this growth. Operating margins expanded to 46%, delivering a Rule of 40 score of 94.
But even perfect execution can’t overcome extreme valuations forever. Palantir would need 50% annual revenue growth for three years with no stock movement to reach reasonable valuation territory.
The recent 18% decline suggests retail support may be cracking. Professional investors have been warning about this outcome for months.
Current analyst consensus points to a Hold rating based on 19 recent reviews. Four analysts recommend buying, 13 suggest holding, and two rate it a sell.
Left’s prediction appears to be playing out in real time. The question now is whether this marks the beginning of the larger correction he forecasted.
