Palantir trades at 158x earnings after 57% gain

Palantir (PLTR) shares have climbed 57% over the past three months, significantly outperforming the S&P 500, which returned 2.8% during the same period. Goldman Sachs upgraded the stock to buy from neutral on October 8, 2026, prompting investors to weigh whether the current price reflects sustainable growth or excessive valuation.

At present, Palantir trades at 158.1 times its trailing twelve-month earnings, a multiple that stands in stark contrast to the S&P 500’s 21.5. This price-to-earnings ratio indicates that buyers are paying for roughly 158 years of current profit for every share. For the stock to align with index valuations without a change in share price, Palantir’s profits would need to increase by approximately seven times. Current investors are effectively betting on that scale of expansion.

Recent financial results support the momentum. Revenue grew 93% in the second quarter of 2026, a rate that management described as the highest the company has reported. Over the last three years, Palantir’s revenue has expanded at an average annual rate of 46.3%, far exceeding the S&P 500’s 5.8% average. The acceleration in growth is primarily driven by the United States, which now accounts for more than 81% of total revenue. U.S. commercial revenue, which excludes government contracts, surged 149% from a year earlier.

Management has set an ambitious target for continued expansion. On August 3, 2026, executives stated their goal is to grow the entire business at least as fast as its U.S. commercial sales for the next 18 months, a benchmark they characterized as very high. The company’s remaining deal value stood at $13.1 billion at the end of the second quarter, an increase of 83% from the prior year.

International performance lags behind domestic results. International commercial revenue grew 26% in the second quarter, and management noted in August that growth in Europe remains poor. The stock has also demonstrated high volatility during market downturns; during the 2022 inflation shock, Palantir shares fell 64% from peak to trough, compared with a 24% decline for the S&P 500.

The next key data point is the third-quarter report for 2026. Management has guided revenue between $2.16 billion and $2.164 billion for the quarter, up from $1.935 billion in the second quarter. A result above this range would indicate sales growth exceeding internal forecasts, while a result within or below it would suggest growth is tracking in line with or below expectations.