<p><strong>Palantir Technologies</strong> <span class="ticker-mention inline-flex items-center font-bold">(PLTR <span class="ml-1 text-red-900">2.37%</span>)</span> is a cornerstone of the artificial intelligence trade, especially among retail investors. The stock has added 150% in 2025, and most Wall Street analysts expect more gains in the coming months. Palantir's median target price of $200 per share implies 6% upside from its current share price of $188.</p>
<p>However, while Palantir's business is firing on all cylinders, history says the stock is likely to crash at some point in the future. Here are the important details.</p>
<div><img alt="A golden bear faces off with a golden bull in front of a stock price chart." width="880" height="587" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NDg4MTEvYnVsbC1hbmQtYmVhci00LmpwZyZ3PTM4NDA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NDg4MTEvYnVsbC1hbmQtYmVhci00LmpwZyZ3PTM4NDA"/>
<p>Image source: Getty Images.</p>
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<h2>Palantir is a leader in AI/ML platforms and AI decisioning software</h2>
<p>Palantir helps organizations manage and make sense of complex data. Its analytics software products (Gotham and Foundry) integrate information into an ontology, a decision-making framework powered by machine learning (ML) models that become increasingly proficient at recommending actions as the system captures more data.</p>
<p>That ontology-based software architecture differentiates Palantir from other data analytics platforms. But the company is truly formidable because it has developed an adjacent artificial intelligence platform (AIP) that lets developers build large language models into workflows and applications. In other words, AIP lets users engage data and automate business processes with natural language.</p><div><div id="foolcom_sidebar_top_container"></div></div>
<p>Chief Revenue Officer Ryan Taylor says Palantir is unique in its ability to move enterprise AI projects from prototype to production. That is partly because its software products revolve around a decisioning framework rather than simply focusing on data, and partly because its engineers work directly with clients to build custom solutions.</p><div><div><div>Advertisement</div><div><div></div></div></div></div>
<p>Of course, whether or not Palantir's products are truly the best at operationalizing AI is a matter of opinion, but the company has received plenty of praise for industry experts. <strong>Forrester Research</strong> has ranked Palantir as a leader in AI/ML platforms and AI decisioning platforms, and the International Data Corporation (IDC) has recognized its leadership in decision intelligence software.</p><div><div id="in_line_article_pitch_container"></div></div>
<p>Looking ahead, Palantir sits in front of a massive opportunity. The AI/ML platform market is forecast to expand at 38% annually through 2033, according to Grand View Research. And Palantir's revenue could grow even faster if it maintains its reputation for cutting-edge data analytics and decisioning tools. Nevertheless, there is one major flaw in the investment thesis: Palantir's absurdly rich valuation hints at a major crash on the horizon.</p>
<section><div><div><div><small><div>Expand</div></small></div><div><img alt="Palantir Technologies Stock Quote" width="64" height="64" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL1BMVFIucG5nJnc9MTI4?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL1BMVFIucG5nJnc9MTI4"/></div><div><h2>NASDAQ: PLTR</h2><div>Palantir Technologies</div></div></div><div><div><div>Today's Change</div><div>(-2.37%) $-4.48</div><div>Current Price</div><div>$184.23</div></div><div></div></div></div><div><div></div><div><h3>Key Data Points</h3><div><div>Market Cap</div><div>$439B</div><div>Day's Range</div><div>$183.66 - $187.18</div><div>52wk Range</div><div>$63.40 - $207.52</div><div>Volume</div><div>884K</div><div>Avg Vol</div><div>48M</div><div>Gross Margin</div><div>80.81%</div></div></div></div></section>
<h2>History says Palantir stock could fall at least 65% in the future</h2>
<p>Palantir is an excellent company. Revenue increased 63% in the third quarter, the ninth straight acceleration, and non-GAAP net income climbed 110% to $0.21 per diluted share. However, Warren Buffett once warned, &#34;A too-high purchase price for the stock of an excellent company can undo the effects of a subsequent decade of favorable business developments.&#34;</p>
<p>Palantir currently trades at 115 times sales, making it the most expensive stock in the <strong>S&amp;P 500</strong> by a wide margin. <strong>AppLovin</strong> is second at 44 times sales. That means Palantir would still be the most expensive stock in the index even if its share price dropped 60%. That is simply unsustainable.</p>
<p>Indeed, I reviewed 70+ software stocks and found only seven others that achieved a price-to-sales (PS) ratio above 100 during the last 20 years. All seven stocks eventually crashed, falling at least 65% after reaching their peak valuation. The average decline was 79%, as detailed below:</p>
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<li><strong>Strategy</strong> peaked at 242 times sales in July 2025 and dropped 65% by December 2025.</li>
<li><strong>Snowflake</strong> peaked at 222 times sales in December 2020 and dropped 73% by September 2024.</li>
<li><strong>SentinelOne </strong>peaked at 148 times sales in September 2021 and dropped 83% by June 2023.</li>
<li><strong>Zoom Communications</strong> peaked at 123 times sales in October 2020 and dropped 90% by June 2024.</li>
<li><strong>Cloudflare</strong> peaked at 114 times sales in November 2021 and dropped 83% by November 2022.</li>
<li><strong>SoundHound AI</strong> peaked at 111 times sales in December 2024 and dropped 70% by April 2025.</li>
<li><strong>Bill Holdings</strong> peaked at 103 times sales in September 2021 and dropped 89% by April 2025.</li>
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<p>There is more bad news. Cloudflare is the only stock listed above to reach a new high after achieving its peak PS multiple. The other six are still down at least 44% from their record highs, and three are still down at least 80%.</p>
<p>Here's the bottom line: History says Palantir stock will eventually fall 79% from its peak valuation. At present, its peak valuation happened in August 2025, when the stock traded at 137 times sales and $187 per share. From that point, a 79% drawdown implies a future price of $39 per share.</p>
<p>Of course, past performance is never a guarantee of future results. Palantir may fall less sharply than other software stocks that have peaked above 100 times sales. But the risk-reward profile is undoubtedly skewed toward risk. So, investors should either avoid the stock or keep their positions very small. I say that as a shareholder myself.</p><div id="article_pitch_container"></div><div id="promobox_container"></div>

PLTR

<p>Palantir Technologies' stock has surged 150% in 2025, with analysts projecting further gains. The median target price is $200, indicating a 6% upside from the current price of $188. Despite strong revenue growth and recognition in AI/ML platforms, the stock's high valuation at 115 times sales raises concerns of a potential crash, as historical data suggests stocks with similar valuations have fallen significantly. Investors are cautioned about the risk-reward profile, with predictions of a possible decline to $39 per share.</p>

- Palantir Technologies, a leader in AI platforms, has seen its stock rise by 150% in 2025, with analysts predicting further gains, but its high valuation poses significant risks.  
- Currently trading at 115 times sales, Palantir's stock could potentially fall significantly, as historical data shows a pattern of sharp declines in similarly valued companies.  
- Despite robust revenue growth and industry accolades, the investment outlook suggests caution, with the possibility of a 79% drop from its peak valuation, leading to a projected price of $39 per share.

Palantir Stock Is Up 150% in 2025. History Says This Will Happen Next.