Palantir💥 Fair Value at $40? Is it Still Your Favorite?
$Palantir Technologies Inc.(PLTR)$ has fallen for five consecutive days, plunging 10% in a single session yesterday.
The biggest headline recently came from Andrew Left, founder of short-selling firm Citron Research, who announced a short position against Palantir. Yet when the news first broke on Friday, the stock only slipped 2%. This sharp selloff feels more like following the trend—when the broader market is ready for a pullback, it often targets the most inflated names. After all, Palantir’s lofty valuation is hardly a new problem.
Palantir’s “Fair Price” at $40?
Citron had previously argued Palantir would only look cheap around $40 per share, but now they’ve revised their stance, claiming even at that level, the stock is still expensive.
Their analysis compares Palantir with OpenAI: if Palantir traded at OpenAI’s 17x sales multiple (based on Bloomberg’s 2026 revenue consensus of $5.6B), the implied price would be about $40 per share. But even then, Citron argues Palantir would remain one of the priciest SaaS stocks.
Andrew Left points out Palantir shares are up 130% YTD, with a staggering P/E ratio of 588x, far above Nvidia’s 58x.
Is Palantir’s Moat Still Holding Up Its Stock Price?
Palantir IPO’d on October 2, 2020 at $10 a share. From there to last week’s $190 peak, it has returned 19x in 5 years—an astonishing climb, despite enduring drawdowns over 40%. The company only turned profitable in 2023, proving its resilience.
Warren Buffett famously said: “If you could only look at one metric when investing in a company, it would be ROE.”
Over the past four quarters, Palantir’s ROE was 15.3% and ROIC 9.2%—not top-tier, but solid. If its Q2 growth momentum continues, and analysts’ forecast of 44.7% annual net profit growth over the next decade comes true, its ROE could rise into elite territory.
The Priciest Stock in the S&P 500
Palantir is already the most expensive stock in the S&P 500. Some traders argue its upside is limited and prefer to play recent hot names like APP, MSTR, RGTI, and CRCL for short-term trades, while long-term positions are still dominated by the Mag 7.
Question:
Is Palantir still your favorite stock?
What’s your #1 pick for short-term and long-term trades—new love or old flame?
REWARDS
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Their analysis puts Palantir against OpenAI: If Palantir trades at OpenAI at 17 times sales multiples (based on Bloomberg's 2026 revenue consensus of $5.6 B), the implicit price will be about $40 per share. But even so, Citron believes Palantir will retain the most expensive one of SaaS stocks.
Palantir remains a core holding for me. Its consistent revenue growth, improving margins, and profitability are rare in the AI-driven software space. I also believe its moat in government contracts and enterprise adoption supports its long-term potential, even if near-term multiples look stretched.
That said, I’m mindful of risks. If the stock breaks below my set support level, I’ll trim my position to control downside exposure. Until then, I’ll continue to hold and watch closely whether upcoming quarters confirm the growth story. In the meantime, I see this pullback as a healthy reset rather than a reason to panic.
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