Palantir Technologies (PLTR) just rolled out a trio of fresh commercial wins, including an expanded AI deal with Mexico’s GNP Seguros, a governed AI framework with Rackspace, and an SAP focused partnership with SNP SE.

For context, Palantir Technologies’ share price is US$132.22. The stock has given up some ground year to date, with a share price return of a 21.23% decline. The 1 year total shareholder return of a 7.62% decline contrasts with a very large 3 year total shareholder return and a more than 5x 5 year total shareholder return. This suggests that long term momentum has cooled but not reversed.

If Palantir’s recent AI deals have your attention, it can be useful to see what else is moving in this theme by scanning 63 profitable AI stocks that aren't just burning cash

For Palantir Technologies, the recent pullback sits against large multi year gains and new AI partnerships in insurance, cloud, and SAP projects. This raises the question of how much of today’s US$132.22 share price really reflects business progress versus sentiment swings.

Most Popular Narrative: 23.5% Overvalued

Compared with the narrative fair value of $107.02, Palantir Technologies at $132.22 sits well above that mark. This is where the most followed thesis starts to focus on valuation tension rather than product strength.

Palantir remains an exceptional company with groundbreaking technology and a clear mission. I have high conviction in its long-term potential and believe it could evolve into another Salesforce, Oracle, or SAP. However, even when factoring in flawless execution and strong future growth, the stock appears overvalued following recent price surges.

Curious what kind of revenue ramp, margin expansion, and rich profit multiple would still result in a fair value below today’s $132.22 price? The narrative walks through a detailed growth path and an elevated earnings multiple that together anchor that $107.02 figure.

Result: Fair Value of $107.02 (OVERVALUED)

However, Palantir Technologies could see this overvaluation thesis challenged if AI demand stays stronger than expected or if profitability metrics hold up better than feared.

Another View on Palantir Technologies’ Valuation

The user narrative pegs Palantir Technologies at $107.02, framing today’s $132.22 price as overvalued. Our DCF model comes to a different conclusion, with a fair value estimate of $149.13, which is about 11.3% above the current share price. Which set of assumptions do you find more convincing?

To see how this cash flow based view is built, take a closer look at how the SWS DCF model handles Palantir’s forecasts and discount rate. Then compare it with the narrative’s more cautious path for margins and growth, using Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Palantir Technologies for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 44 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

If all this leaves you torn between caution and optimism on Palantir Technologies, consider taking action soon and stress test the facts that matter most to you, starting with 3 key rewards

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.