①As of the U.S. stock market close on December 24, Palantir's share price had risen over 156% year-to-date, ranking eighth among the S&P 500 components; ②According to VandaTrack data, net purchases by retail investors in Palantir amounted to nearly $8 billion this year, an increase of over 80% compared to 2024 and five times the amount in 2023.
As of the U.S. stock market close on Wednesday (December 24), $Palantir (PLTR.US)$ the stock price has surged over 156% year-to-date, ranking eighth among the S&P 500 components. Driven by the artificial intelligence boom, the stock has become an undisputed star among retail investors.
According to VandaTrack data, as of December 8, net purchases by retail investors in Palantir amounted to nearly $8 billion this year, an increase of over 80% compared to 2024 and five times the amount in 2023.
Data from Vanda also shows that Palantir is on track to become the fifth most net-bought stock by retail investors this year, trailing only $NVIDIA (NVDA.US)$ 、 $Tesla (TSLA.US)$ two tech giants, and $SPDR S&P 500 ETF (SPY.US)$and $Invesco QQQ Trust (QQQ.US)$ 。
Viraj Patel, Deputy Head of Research at Vanda, stated that Palantir’s performance has been particularly remarkable, with the stock essentially entering the ranks of 'poster-level stars' in artificial intelligence technology.
Palantir is poised to achieve triple-digit percentage gains for the third consecutive year. As its share price soars, Palantir has successfully won the hearts of a large number of retail investors.
"Crazy" Business
Since its listing in 2020, Palantir has been regarded as a rather mysterious company, serving both government departments and private enterprises.
On the surface, Palantir assists governments and large corporations in organizing and analyzing data. In addition to being considered a beneficiary of the AI wave, under Trump's policy direction of enhancing federal efficiency and strengthening defense capabilities, the company is also seen as a potential winner.
Paxton Earl, an investment banker specializing in the software industry, remarked, "There was a time when we used to joke, 'What exactly does Palantir do?'" However, after reading regulatory reports and gaining further insights, he recalled thinking, "This is truly an incredible company. It really stands out."
Earl discovered that Palantir's revenue structure is more diversified than he initially expected, not solely reliant on military projects. The company’s client portfolio also includes some consumer brands familiar to him, such as Ferrari and Wendy's.
Retail investor enthusiasm continues to rise.
Earl stated that after Palantir released its Q3 earnings report in early November, he further purchased shares of the stock. That month, due to growing market concerns over AI valuations, Palantir’s share price fell by 16%, marking its worst monthly performance in more than two years.
At the time, Wall Street generally attributed the sell-off to profit-taking and concerns about the overall health of the AI sector.
Unlike most companies that only take questions from analysts or the media during earnings calls, Palantir also responds to queries from retail investors. At the end of last year, CEO Alex Karp even specifically thanked these small shareholders in an annual video recorded on a ski slope.
In the video, Karp, wearing reflective goggles and holding ski poles, stated: 'I am extremely grateful to all the retail investors who took the time, seized the opportunity, and had the courage to step outside the tired clichés.'
On Reddit's WallStreetBets forum, Palantir has become a hot topic. According to data from Breakout Point, a 'meme stock' tracking agency, it was the most frequently mentioned stock on multiple trading days in 2025.
Ivan Ćosović, Managing Director of Breakout Point, said, 'Palantir has always been a long-term 'darling' of WallStreetBets; they truly love it.'
Of course, not all discussions have been positive. Some investment content creators have questioned whether holding Palantir shares is ethically appropriate given the company’s collaborations with war technology and ICE (U.S. Immigration and Customs Enforcement).
Hesitation from large funds.
In contrast to the frenzy of retail investors, Wall Street has not actively entered the market. An LSEG survey shows that analysts' average rating for the stock is "Hold," with many expressing concerns about its high valuation (P/E ratio).
Gil Luria, Director of Technology Research at D.A. Davidson, stated that Palantir's valuation level is "simply unapproachable" for institutional clients. The stock's P/E ratio is approximately 450 times its earnings over the past 12 months, far higher than the S&P 500's average of around 28 times.
Luria acknowledged that retail investors may be more easily swayed by Palantir's "ambitious" mission, especially its potential role in defense. Additionally, he compared Karp to Tesla CEO Musk, noting that he is similarly skilled at promoting the company’s vision but with far fewer controversies.
Luria pointed out that Palantir's situation is somewhat akin to Tesla's a decade ago—when the latter was outlining a future dominated by electric vehicles. The question is whether retail investors who bet on Tesla back then will also make the right call this time with Palantir.
Luria noted that Palantir's performance in recent years has been robust overall. The earnings report released in August not only exceeded Wall Street expectations but also raised its full-year guidance amid the AI boom, prompting him to reconsider whether to invest at such a high valuation.
"Even we, the most old-school and cautious Wall Street analysts, were shocked by the extent of its success. It succeeded so dramatically that I had to reevaluate all my previous judgments."
Is it overvalued, or destined to win?
Last month, Michael Burry, the real-life inspiration behind the movie 'The Big Short,' disclosed short positions in Palantir and NVIDIA. However, retail investors have not backed down due to institutional caution.
As Ćosović from Breakout Point put it: Burry sees overvaluation, while on WallStreetBets, retail investors see 'the stock that is destined to take off and destined to win.'
Palantir's share price has seen significant fluctuations this year, with declines exceeding 10% on multiple trading days. However, for retail investors who are bullish on the stock in the long term, these fluctuations represent opportunities to add positions at lower prices.
Kyle Dijamco, an employee of Palantir who has purchased the stock multiple times, stated, "You gradually become numb to price fluctuations. I just have that belief that it will eventually perform well."
Editor /rice