Palantir’s $500 Billion Dream: Can the Data Giant Defy Gravity in 2025?

Palantir Technologies is flirting with Wall Street’s ultimate fantasy—a half-trillion-dollar valuation. But can Peter Thiel’s secretive data empire really pull it off this year?

The hype machine is running at full throttle. AI contracts, government deals, and that cult-like investor base—Palantir’s got the ingredients. But so did Theranos.

Let’s break down the math. Hitting $500B would require nearly tripling its current market cap. Even for a company that treats ‘GAAP profitability’ like an optional feature, that’s a stretch.

Meanwhile, hedge funds are placing bets like it’s 2021 all over again. Because nothing says ‘sound investment’ like chasing a stock that trades at 25x sales—unless you’re into that kind of pain.

One thing’s certain: if Palantir crashes through that ceiling, Wall Street’s champagne corks will pop louder than their risk management departments’ screams.

Image source: Getty Images.

Has Palantir won over its naysayers?

In previous years, Palantir looked like a much riskier business to invest in, as it wasn't profitable and there were more doubts about its long-term potential. But AI has drastically changed that and transformed the business into a growth machine. The company is now profitable and growing at a fast rate. What's also particularly telling is that short interest in the stock (as a percentage of the float) has been falling.

PLTR Percent of Float Short data by YCharts

This could be a sign that bearish investors are giving up and perhaps becoming believers in the business. But even if that's not the case, the decline in short interest does indicate fewer people are willing to take a chance in betting against this fast-growing stock. Shorting a stock that's been on such a rapid tear would surely have been a perilous MOVE for many investors over the past year.

Is a $500 billion market cap just the next milestone for Palantir?

Given how unstoppable the stock appears to be, investors may believe that Palantir is on its way to a $1 trillion market cap, and that $500 billion may just be a short-term target. Its market cap is around $440 billion, meaning that Palantir would only need to rise another 14% to reach a valuation north of $500 billion. Based on its performance, that doesn't seem like much of a stretch at all this year.

The company is coming off an excellent second quarter, where it grew its sales by 48% to over $1 billion for the period ending June 30. Its net income totaled $327 million and was up over 140% year over year.

Investors are paying for a lot of future growth, however, as Palantir's stock trades at a forward price-to-earnings multiple of 285. And while its shares soar, investors shouldn't lose sight of that premium.

Palantir's stock looks unstoppable, but that doesn't mean it will stay that way

In just 12 months, Palantir's stock has surged more than 500%. It's an incredible climb for the business, but it has become a highly speculative stock to own. As of writing this article, the company is more valuable than many top blue-chip stocks, including,, and.

Investors who continue to buy into this rally while ignoring valuation may be putting their portfolio in harm's way, as this is a stock that could have a long way to fall in a market correction. Palantir isn't a bad company to invest in, but its valuation has gotten completely out of hand, which is why I can't suggest buying shares of it, even though it may appear destined to rise higher. This is a highly speculative buy, making it a suitable option only for investors with a high risk tolerance.