Analysts Predict Sharp H2 2025 Drop for Palantir Stock
Palantir stock is on a wild ride. In June 2025, it hit a record high near $137. That’s a big jump from where it started the year. Much of this growth came from its AI tools and big government deals.
But now, many analysts are warning us to be careful. They say Palantir may not keep climbing. Some even believe it could fall sharply in the second half of 2025.
So, what’s really going on? Is the stock overhyped, or does it still have room to grow?
Let’s walk you through what’s driving the stock, why experts are getting nervous, and what this could mean for investors like us.
Palantir Stock: What Fueled the Run-Up?
In early 2025, Palantir surged about 70-75%. This came from:
- AI boom: Its AIP product gained major traction in commercial sectors.
- Big contracts: Q1 revenue reached $884M (+39% YoY), thanks to defense and commercial wins.
- Profit growth: Operating margins jumped to 36%, free cash flow forecast reached $ 1.6-1.8 B.
These strengths made its price skyrocket. But such rapid growth drew attention and doubts.
Why Analysts See Trouble Ahead
Palantir trades at over 200× forward earnings and 100× sales, far above peers. Trivariate Research warns it’s “one-stock bubble” territory.
Major institutional investors, like Cathie Wood and Druckenmiller, have trimmed positions. Those smart investors may see danger ahead.
The median 12-month price target is about $100. That’s nearly a 25% drop from current levels. Jefferies slashed their target to $60, citing valuation and insider selling. Even Morgan Stanley holds a $60 target.
Broader Risks at Play
Market correction danger: JPMorgan’s Kolanovic warns of a 5-10% pullback that could hit momentum-heavy names like PLTR.
The Trump-Musk feud and weaker economic signals could spark a broader tech selloff.
Government budget cuts: Rumors of U.S. defense spending reductions knocked PLTR down ~10% previously. Given that government deals make up about 40-55% of revenue, cuts could sting.
Insider selling: CEO Alex Karp and co-founder Stephen Cohen have sold shares recently, another flag for those watching.
Balancing the Bright Spots
Not everything is grim:
- U.S. commercial revenue jumped 71% in Q1 to $255 M.
- Operating margin at 36%, and cash vault of ~$3.9B provide flexibility.
- AIP continues to expand into non-defense industries healthcare, finance, and energy.
- Even if stocks dip, retail investors may step in to buy the dip.
Still, these strengths must outpace the stock’s high expectations.
Possible Drop Scenarios
Here’s how it could play out:
- Base Case: A ~25% fall to $100, matching consensus target.
- Bear Case: A 55% plunge to $60 if valuation rebalances sharply.
- Mild Correction: A 10-20% decline in a broader tech pullback.
Investors should weigh which scenario fits their risk style.
Advice for Investors
- Consider balancing with bonds or other tech exposures.
- Support lies around $130-$125. Watch closely below $100.
- If you’re long-term bullish on AI, dips could be buying opportunities. But short-term traders should stay alert.
Final Take
Palantir’s story is a mix. On one hand, it brings strong growth, major contracts, high margins, and a powerful AI platform. On the other hand, its valuation is extreme, insiders are selling, and macro risks are rising.
We believe H2 2025 may bring pain. It might even get painful. Still, this isn’t a run-of-the-mill tech stock. It has real value. So, watch the signals. Know your risks. And make decisions that match your goals.
In the fast world of AI-driven stock moves, being prepared matters more than being right.
Frequently Asked Questions (FAQs)
Palantir may grow with new AI tools and government work. But experts warn it could drop if spending slows or the market corrects.
Some analysts think the stock is too expensive. Others believe it has strong future growth. Most agree it’s risky at current prices.
Palantir is falling due to high stock prices, profit-taking, and fears of lower government spending. The market may also be cooling down.
Most experts think Palantir could drop to around $100 in the next year. Some see it going even lower if the tech bubble bursts.
Disclaimer: This content is made for learning only. It is not meant to give financial advice. Always check the facts yourself. Financial decisions need detailed research.