The performance of Palantir shares has delivered spectacular returns for investors this year, yet the data analytics firm now finds itself at the center of a fierce debate. As some major institutional players make billion-dollar bets by significantly increasing their holdings, others are hitting the sell button to lock in profits. With the stock trading at exceptionally high valuation multiples, a critical question emerges: is the current enthusiasm still warranted, or is a painful correction imminent after this powerful rally?
A Valuation Conundrum
The fundamental data provides ample fuel for these discussions. Operationally, the artificial intelligence leader is firing on all cylinders. Its third-quarter results for 2025 surpassed all expectations with revenue surging nearly 63%, driven primarily by explosive growth in its U.S. commercial business, which more than doubled compared to the previous year.
This operational success, however, comes with a steep price tag on the public markets. The equity now trades at valuation levels that defy historical norms. Sporting a price-to-earnings ratio approaching 390, even AI pioneer NVIDIA appears reasonably priced in direct comparison. Market researchers have responded with caution to these multiples, with the average analyst rating standing at just “Hold.” The consensus suggests limited additional upside potential from current levels, accompanied by increasing risk of downward corrections.
Should investors sell immediately? Or is it worth buying Palantir?
The technical chart pattern reflects this underlying uncertainty. Although the security remains up approximately 100% since the start of the year, it has retreated noticeably from its recent 52-week high near 180 euros. Investors now face a critical decision point: should they follow the bold moves of sovereign wealth funds or heed the warning voices of analysts who perceive market overheating?
Major Institutional Moves Behind the Scenes
Remarkable activity is unfolding behind the market’s curtain. Recent regulatory filings reveal that sophisticated institutional investors are pursuing dramatically different strategies. Norges Bank has generated particular attention: Norway’s giant sovereign wealth fund executed substantial purchases, acquiring a position exceeding 24 million shares worth billions—a powerful endorsement and clear vote of confidence in the company’s future trajectory. Simultaneously, Quadrature Capital nearly doubled its stake during the second quarter, placing an aggressive bet on the artificial intelligence trend.
Caution is advisable, however, as not all market participants share this optimistic outlook. Other asset managers including Virtus Investment Advisers have used the elevated share prices to realize gains, trimming their holdings by approximately 30%. This divergence among professional investors indicates that the stock’s future direction remains fiercely contested territory.
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