Palantir Technologies Inc. (PLTR) has seen its stock price rise over 130% this year, now trading around $184.63. The surge follows substantial government contracts, including a $10 billion deal with the U.S. Army and a £1.5 billion partnership in the U.K. In Q2, the company reported $1 billion in revenue and earnings per share (EPS) of 16 cents, surpassing expectations. Even after raising its full-year projections, concerns about its high forward price-to-earnings (P/E) ratio, which is above 200, continue. Analysts are cautious and have given it a “Hold” rating, with price targets ranging from $45 to $215.
Palantir is also expanding in the commercial sector by partnering with companies like Snowflake to boost AI capabilities. This strategy integrates its products—Foundry, Gotham, Apollo, and AIP—across both public and private spheres. However, with a forward P/E ratio of 277, there is a risk of stock decline if the company doesn’t meet growth expectations. Competitors like AMD and ASML could become attractive alternatives if Palantir’s high valuation cannot be sustained.
Recent Elliott Wave analysis shows Palantir’s stock rose to $190.00, then fell to $142.34, indicating wave IV. Wave V is expected to extend, targeting a range of $201.49 to $219.79. A possible correction might bring the stock back to $142.34, with speculation it could retrace to $100 per share.
Currently, Palantir is trading near $184.63 after a significant 130% increase this year. The stock seems fundamentally overvalued and technically close to a peak. Its forward P/E ratio above 200 requires perfect performance. With third-quarter earnings coming up in November 2025, any slight miss could lead to a sharp correction.
We see the stock possibly making one last push into the $201–$220 range, according to technical analysis. Traders wanting to take advantage of this final upswing might consider using short-dated call options expiring in late November. A similar trend was seen in late 2023 with other AI stocks that surged before entering a period of consolidation.
However, a more prudent strategy might be to prepare for a potential downturn. Current high implied volatility for Palantir options makes outright purchases of puts expensive. A better strategy could be to sell out-of-the-money bear call spreads with a strike above $220, enabling traders to profit from time decay if the stock does not reach new highs.
It’s also important to keep an eye on the broader market. The S&P 500 is up nearly 20% this year, making high-growth stocks like Palantir particularly vulnerable during market pullbacks. A crucial technical level to monitor on the downside is $142.34. If the stock breaks below this level, it could indicate the start of a correction, with a possible retest of the $100 support level.
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