Why I’m now backing this popular tech stock
An already meteoric rise may have further to run for this fast-growing tech giant that just keeps breaking records. Analyst Rodney Hobson explains why.
12th November 2025 08:45
by Rodney Hobson from interactive investor
Stars shine and fade in the fast-moving world of technology. One star in the ascendancy at the moment is Palantir Technologies Inc Ordinary Shares - Class A (NASDAQ:PLTR)and there could be further momentum from an end to the shutdown of the United States Government as the debt ceiling is once again raised.
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Palantir, the data and software company, certainly shone in the third quarter with its highest sales yet at nearly $1.2 billion, ahead of forecasts and 63% higher than a year earlier. Even better, net income at $476.7 million was triple the profit it earned in the three months to September last year. It is always good news when profits rise faster than revenue; great news when profits are racing way ahead of revenue.
Everywhere you look in the figures the news is good. For example, US commercial revenue doubled and government revenue rose by more than half. Palantir signed more than 200 deals worth more than $1 million apiece and more than 50 worth at least $10 million. The total of nearly $2.8 billion was Palantir’s best quarter so far and more than double the previous third quarter. Nothing succeeds like excess.
Love it or hate it, the results are all down to artificial intelligence, which, as chief executive Alex Karp says without fear of contradiction, is having a “transformational impact”.
Palantir raised its guidance for the full year, as it now expects revenue of $1.33 billion in the fourth quarter, which will be another record, producing nearly $700 million in adjusted income from its operations.
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The group now reckons that revenue for 2025 could be as high as $4.4 billion as opposed to an earlier maximum forecast of $4.15 billion, mainly from a better performance in the already buoyant American commercial sector. Adjusted income from operations is now set to reach $2.15 billion rather than stick below $2 billion and free cash flow is likely to top $2 billion.
The stunning progress has naturally been reflected in the share price, with Palantir soaring in step with the entire technology sector in America. Palantir stock has been gathering momentum since May 2023, when the price was only $7.50. It now stands at $191, having briefly crossed the $200 barrier at the end of last month.
Source: interactive investor. Past performance is not a guide to future performance.
The price/earnings (PE) ratio is staggeringly high at over 400 but that figure reflects the very high hopes for rapidly increasing profits for the foreseeable future. There is no dividend as cash is ploughed back into the expanding business, a situation that is likely to continue for several years.
Hobson’s choice: This is clearly not a stock for income seekers. It is, however, certainly of interest to active traders, as the share price is prone to move up or down – mostly up – several dollars in any trading day.
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I have long been scornful of Palantir’s massive PE, which has been as high as 600, but I have to admit that my previous exhortations to get out of the stock have been well wide of the mark. Despite the hefty valuation, sentiment remains in favour of Palantir and, if you can’t beat them, join them. With considerable misgivings, I must switch to saying buy while the technology bandwagon still rolls – but only if you are willing to stand a rollercoaster ride. Shareholders who invest for the long term should hold on for further capital gains.
This assessment is on the assumption that the funding Bill to break the deadlock for the federal government passes through the Senate and is signed off by President Trump, ending the longest shutdown Washington has even experienced. Share prices generally are advancing on the assumption that normal service will be resumed and will fall back sharply if hopes are dashed, which is admittedly most unlikely given that executive and legislators do not want to be seen prolonging the disruption to government services.
Rodney Hobson is a freelance contributor and not a direct employee of interactive investor.
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