Analysts Predict Palantir and Fastly Shares to Drop Over 55%
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 23 2026
0mins
Should l Buy PLTR?
Source: NASDAQ.COM
- Significant Valuation Risk: Analysts predict Palantir's stock could drop over 55%, despite a 70% year-over-year revenue increase to $1.4 billion in Q4 2025, driven by strong demand for its AI platform; however, its forward P/E ratio of 84.1 indicates the stock price has outpaced fundamentals.
- Strong Contract Growth: Palantir signed contracts worth approximately $4.3 billion in Q4, a 138% year-over-year increase, indicating accelerated customer adoption of its AI platform, yet analysts remain concerned about its high valuation and potential for a correction.
- Execution Risks for Fastly: Fastly's median price target is $14, representing a 47% downside from its last closing price, with Citigroup's target at $10, suggesting a 62% decline; despite a 15% year-over-year revenue growth to $624 million in fiscal 2025 and achieving profitability for the first time, caution remains.
- High Capital Expenditure Pressure: Fastly anticipates capital expenditures to reach 10% to 12% of revenue in 2026, combined with a forward P/E ratio exceeding 70 and unpredictable customer traffic, poses significant risks to future growth, although its non-GAAP net income of $19.7 million indicates improving financial performance.
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Analyst Views on PLTR
Wall Street analysts forecast PLTR stock price to rise
17 Analyst Rating
5 Buy
10 Hold
2 Sell
Hold
Current: 143.060
Low
50.00
Averages
192.88
High
255.00
Current: 143.060
Low
50.00
Averages
192.88
High
255.00
About PLTR
Palantir Technologies Inc. is engaged in building software to assist in counterterrorism investigations and operations. The Company has built four principal software platforms, including Palantir Gotham (Gotham), Palantir Foundry (Foundry), Palantir Apollo (Apollo), and Palantir Artificial Intelligence Platform (AIP). Apollo is a cloud-agnostic, single control layer that coordinates ongoing delivery of new features, security updates, and platform configurations, helping to ensure the continuous operation of critical systems. Gotham enables users to identify patterns hidden deep within datasets, ranging from signals intelligence sources to reports from confidential informants. Foundry transforms the ways organizations operate by creating a central operating system for their data. AIP enables responsible artificial intelligence (AI)-advantage across the enterprise by using primary, core components built to effectively activate large language models and other AI within any organization.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Strong Financial Performance: Palantir's Q4 revenue grew 70% year-over-year to $1.4 billion, with commercial segment revenue surging 137% to $507 million, demonstrating the utility and demand for its systems; despite a current P/E ratio of 225, the expected drop to 77 next year indicates significant future growth potential.
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- Valuation Concerns: Currently, Palantir trades at nearly 250 times trailing earnings, significantly above the software industry average, suggesting that the market has already priced in its future growth, prompting investors to carefully assess its long-term value.
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- Palantir Contract Expansion: Palantir's AI platform has enabled clients to better analyze data, with contract values increasing from $7 million to $31 million, indicating successful real-world applications of AI technology that meet customer expectations.
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- Defense Department Recognition: The U.S. Department of Defense has designated Palantir's Maven Smart System as an official 'program of record,' simplifying adoption and providing long-term funding support across all military branches, with implementation expected by the end of the fiscal year, indicating further expansion for Palantir in the military sector.
- Financial Regulatory Collaboration: The U.K. Financial Conduct Authority (FCA) is running a three-month pilot program with Palantir to utilize its Foundry platform to analyze data from 42,000 financial services firms to identify potential financial crimes, which could lead to full procurement if successful, further expanding Palantir's market reach.
- Missile Defense System Development: Palantir has been awarded a key software development contract for the $185 billion Golden Dome missile defense system, with estimates suggesting this contract could yield billions in revenue, further solidifying its position in the defense sector.
- Strong Financial Performance: Palantir's Q4 revenue grew 70% year-over-year to $1.4 billion, with commercial segment revenue surging 137% to $507 million, demonstrating the utility and demand for its systems; despite a current P/E ratio of 225, the expected drop to 77 next year indicates significant future growth potential.
See More
Palantir Stock Fluctuations and Future Outlook
- Stock Performance: Since the beginning of 2023, Palantir has been a top performer, with a $10,000 investment now worth nearly $223,000, yet the stock has declined 31% from its November peak, indicating increased market volatility.
- Revenue Growth: In Q4 2023, Palantir's revenue surged 70% year-over-year to $1.4 billion, showcasing its strong growth potential in the AI sector, with projections of 62% growth in 2026 and 43% in 2027.
- Valuation Concerns: Currently, Palantir trades at nearly 250 times trailing earnings, significantly above the software industry average, suggesting that the market has already priced in its future growth, prompting investors to carefully assess its long-term value.
- Future Outlook: Despite expectations of 536% revenue growth over the next five years, if the stock price remains stagnant, investors may face limited returns, raising concerns about Palantir's long-term investment viability.
See More
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- Market Volatility: Despite the S&P 500's nearly 80% rise over the past three years, recent concerns about an AI bubble and geopolitical uncertainties have led to fluctuations in AI stock performance, reflecting the complexity of market sentiment.
- AWS Revenue Surge: Amazon's AWS has reached an annual revenue run rate of $142 billion due to surging demand for AI, demonstrating significant impacts on operational efficiency and customer purchasing behavior, thereby reinforcing its market leadership.
- Palantir Contract Growth: Palantir Technologies' AI platform has enabled existing customers to expand contracts significantly, with a utility company increasing its annual contract value from $7 million to $31 million, showcasing the tangible value of AI applications.
- Investment Trends: Major tech companies are expected to invest nearly $700 billion this year to support the demand for AI products and services, indicating strong market confidence and potential growth opportunities for AI, despite challenges faced by individual companies.
See More
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- Current AI Market Status: Despite the application of AI technology across various sectors, recent losses in AI stock momentum have raised investor concerns about a potential AI bubble, leading to fluctuations in the S&P 500 and reflecting market uncertainty regarding future growth.
- Amazon Web Services Performance: Amazon's AWS has reached an annual revenue run rate of $142 billion driven by AI demand, with customers using the shopping assistant Rufus being 60% more likely to make a purchase, demonstrating significant effectiveness in enhancing business efficiency.
- Palantir Contract Expansion: Palantir's AI platform has enabled clients to better analyze data, with contract values increasing from $7 million to $31 million, indicating successful real-world applications of AI technology that meet customer expectations.
- Investment Trends: While some companies may face challenges, overall demand for AI remains strong, with major tech firms expected to invest nearly $700 billion this year to support this growth, suggesting that AI continues to be a solid long-term investment opportunity.
See More
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- High Call Option Activity: Notably, the $60 strike call option expiring on May 15, 2026, saw 2,780 contracts traded today, representing around 278,000 underlying shares, suggesting that investors are increasingly optimistic about Sonoco's stock price appreciation.
- Applied Digital Options Dynamics: Applied Digital Corporation's options trading reached 102,143 contracts, translating to approximately 10.2 million shares, which accounts for 65.2% of its average daily trading volume of 15.7 million shares over the past month, reflecting active market interest in its stock.
- Bullish Call Option Trends: Particularly, the $24 strike call option expiring on April 2, 2026, recorded 5,025 contracts traded today, representing about 502,500 underlying shares, indicating strong investor confidence in Applied Digital's future growth prospects.
See More
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- Sales and Backlog: Despite only generating $309,920 in sales for 2025, the company boasts a backlog of $16.3 million, which is expected to convert into revenue in the coming years, indicating significant future growth potential.
- Stock Performance: Since its IPO on March 17, Swarmer's stock has surged from $12.50 to the current price of $3.64, reflecting a 10.44% increase, indicating strong bullish sentiment among retail investors regarding its long-term prospects.
- Risks and Competition: While Swarmer's market cap stands at approximately $470 million, it remains unprofitable with an $8.5 million loss last year, facing intense market competition, necessitating careful risk assessment by investors.
See More
