Palantir stock made headlines this week after former President Donald Trump’s administration reportedly selected Palantir Technologies Inc. (NYSE: PLTR) as its primary data analysis partner. The news, tied to a new executive order aimed at improving inter-agency data sharing, triggered a sharp rally in Palantir stock. But before investors rush in, it’s worth asking: is Palantir stock still a smart long-term investment—or simply riding a wave of short-term hype?
Let’s break it down.
What Just Happened?
According to The New York Times, Trump’s renewed emphasis on national security and government efficiency has led to Palantir being tapped for a more expansive role in federal data analytics. The move reinforces the Denver-based company’s long-standing relationship with government agencies like the Department of Defense and ICE.
Investors were quick to react. Palantir stock jumped nearly 8% on the day of the news, continuing a strong upward trend that’s seen shares surge more than 75% from their year-to-date lows.
Why the Market’s Excited
Palantir has always been a favorite among tech bulls and retail investors, especially those betting big on artificial intelligence (AI). The company offers sophisticated data analytics platforms like Gotham and Foundry, used by both government and commercial clients.
This new government endorsement isn’t just about prestige—it could mean major long-term revenue, contracts, and a stronger moat in the crowded AI space. Investors love government ties because they often bring reliable, large-scale income over many years.
But There’s a Catch
While the headlines may be bullish, a deeper look reveals reasons to be cautious.
In the past week alone, Palantir CEO Alex Karp sold over $50 million worth of stock. He wasn’t the only one. Other top execs—like CTO Shyam Sankar and co-founder Stephen Cohen—dumped nearly $65 million in shares combined.
When multiple insiders sell large amounts of stock all at once, it’s often a red flag. It doesn’t necessarily mean bad news is coming, but it does raise a fair question: if PLTR is such a great buy, why are the people running the company selling?
Valuation: A Tough Pill to Swallow
Palantir’s current valuation is eyebrow-raising. It trades at a forward P/E ratio of over 200, far above even AI darling Nvidia, which sits closer to 30. Its price-to-sales ratio hovers around 98, suggesting the stock is priced for perfection—not reality.
Yes, Palantir is growing. But its most recent quarterly revenue increased just 39% year-over-year, with the commercial side jumping 71%. Compare that to Nvidia, whose Q1 revenue spiked 69%, and you’ll see why some analysts argue that PLTR’s valuation simply isn’t justified.
And no, Palantir doesn’t offer a dividend to sweeten the deal for long-term holders.
The Bullish Argument
Still, some experts remain bullish. David Kudla, CEO of Mainstay Capital, recently pointed out that Palantir is “leveraging AI very well, particularly in counterterrorism.” The company is also expanding its commercial footprint, which could help balance its reliance on government contracts.
For those who believe in AI’s long-term growth—especially in defense and security—PLTR remains a compelling, if risky, play.
So, Should You Buy?
That depends on your risk tolerance and time horizon.
If you’re a long-term investor who believes Palantir will dominate the AI analytics space across both government and private sectors, you might view today’s price as a justified premium. But if you prefer value stocks, predictable earnings, or dividend-paying assets, this might not be your ideal pick—at least not at current levels.
One thing is clear: the hype is real, but so are the risks.
Final Thoughts
Palantir’s partnership with the Trump administration is a big win—and it validates the company’s role in shaping how government agencies use data. But stock price doesn’t always reflect fundamentals. With heavy insider selling and sky-high valuations, PLTR may be more of a speculative bet than a sure thing.
As always, do your homework, consider your portfolio goals, and never chase headlines blindly.