Palantir CEO Alex Karp (Jemal Countess/Getty Images)

Valuation

Citi on Palantir: Fundamentals are good, but “we continue to have concerns” about valuation

It’s always the valuation.

6/12/25 10:07AM

Citi analysts following Palantir published a new note on the stock after sitting down with CFO David Glazer in New York recently. The upshot?

The business is doing very well, with fast growth expected for the purveyor of AI, data management, and defense-related software services on a number of fronts, from its all-important government contracting business — Uncle Sam is its single largest customer — to international commercial and government sales in the Middle East, to growing corporate uptake of Palantir’s AI platform for commercial clients.

The catch, of course, is the valuation of the shares, where Palantir is an absurd outlier across any range of metrics.

Price to expected 2025 sales? 112x. (Even Tesla, also a wildly popular retail stock and one that trades with little reference to its business fundamentals, has a price-to-sales multiple of just 12x.)
Palantir’s enterprise-value-to-next-12-month-sales multiple? 72x. That’s the kind of valuation you sometimes get on highly speculative penny stocks, not a $320 billion corporate titan.
And on good old-fashioned price to next 12-month earnings, the market gives Palantir a 210x multiple, about 10x the S&P 500’s PE of about 21.5x.

All these figures suggest that by any traditional market rule of thumb, all of Palantir’s — admittedly impressive — growth, and then some, has already been priced in to the shares and extrapolated with overwhelming certainty to continue far into the future.

That’s basically why Citi analysts didn’t make any major changes to their call on the stock after the meeting, keeping their target price on the shares at $115, where it’s been since early May. They wrote:

“The meeting reiterates our upbeat view on PLTR fundamentals, but we continue to have concerns on how stock can grow into its valuation, especially if magnitude of positive revisions slow or large contracts (i.e., Golden Dome) don’t materialize as expected.”

Of course, the Palantir faithful scoff at concerns about valuation. And maybe for good reason: if they had let such concerns about valuation dissuade them from holding the shares, they would’ve missed out on a remarkable gain of 470%(!) in the past 12 months alone.

That’s by far the best performance of the S&P 1500 Index, which captures more than 90% of the US stock market in terms of capitalization.

Luke Kawa5h

Micron soars after reporting huge Q1 beat, with Q2 sales guidance ahead of every Wall Street analyst’s estimates

Micron completely erased Wednesday’s big losses in after-hours trading after the memory chip specialist posted stellar results for its fiscal Q1 2026 and a much better outlook for the current quarter than Wall Street had anticipated.

For Q1, the company reported:

Revenues: $13.64 billion (estimate: $12.95 billion)
Adjusted earnings per share: $4.78 (estimate: $3.95)

And the Street’s consensus was well ahead of even the upper ranges of the guidance provided by management for the quarter for sales of $12.5 billion (plus or minus $300 million) and $3.75 (plus or minus $0.15).

For Q2, management provided an outlook for adjusted revenues of $18.3 billion to $19.1 billion, and adjusted EPS of $8.22 to $8.62. Wall Street had penciled in revenues of $14.38 billion with adjusted EPS of $4.71.

Even the bottom end of the ranges management provided is well above the top analyst’s estimate for the quarter.

These results may help spark a revival in semi stocks, which have gotten trounced in recent sessions. Hard disk drive sellers Seagate Technology Holdings and Western Digital are also rising in after-hours trading, as is flash memory seller Sandisk.

Micron has been one of the worst performers in the S&P 500 since last Thursday’s record close, down double digits from then until Wednesday close as investors broadly dumped AI names. Prior to that, shares had been on fire amid a bevy of Wall Street price target hikes and surging memory chip prices as demand runs ahead of supply. The AI boom has fueled a spike of immense appetite not only for GPUs and custom chips but also memory chips as well, as data centers also need a boatload of these to store information and feed it to those processors. Micron and its major competitors, SK Hynix and Samsung, have already sold out production for their most advanced high-bandwidth memory offerings for calendar year 2026.

Micron recently announced that it would be exiting its consumer chip business to focus on serving its AI customers.

Toby Bochan

Market wrap

Markets slump as AI trade tumbles

Tech dragged US stocks lower, especially the Nasdaq 100.

The East Side of the US Capitol Building in the early morning, Washington DC, USA.

Group of House Republicans defy leadership and join Democrats to force ACA vote

The subsidies are still likely to end before the deadline.

J. Edward Moreno10h

Luke Kawa

11h

Bitcoin is behaving like a no-fundamentals tech stock

The three-month correlation between the daily changes in the iShares Bitcoin ETF and a Goldman Sachs basket of nonprofitable tech stocks is at a record high.

Matt Phillips11h

Oracle slides on report that data center partner Blue Owl won’t fund $10 billion Michigan facility; company says project is on track without Blue Owl

Oracle shares declined early Wednesday after the Financial Times reported that Blue Owl Capital, the largest funder of Oracle’s data center investment push, will not finance a 1-gigawatt Oracle data center planned for Saline Township, Michigan. The pink-paged periodical reports:

“Blue Owl had been in discussions with lenders and Oracle about investing in the planned 1 gigawatt data centre being built to serve OpenAI in Saline Township, Michigan.

But the agreement will not go forward after negotiations stalled, according to three people familiar with the matter.

The private capital group has been the primary backer for Oracle’s largest data centre projects in the US, investing its own money and raising billions more in debt to build the facilities. Blue Owl typically sets up a special purpose vehicle, which owns the data centre and leases it to Oracle.”

For its part, Oracle told Bloomberg on Wednesday morning that negotiations for a data center project in Michigan are “on schedule” and don’t include Blue Owl.

While not horrible, Wednesday’s drop puts Oracle down 15% so far this week, as the shares continue to be clobbered by rapidly shifting investor sentiment toward lofty AI investment plans.

Oracle is down roughly 45% from the all-time high it hit on September 10, in a plunge that has destroyed more than $400 billion in value. Yowza.

“Blue Owl had been in discussions with lenders and Oracle about investing in the planned 1 gigawatt data centre being built to serve OpenAI in Saline Township, Michigan.

But the agreement will not go forward after negotiations stalled, according to three people familiar with the matter.

The private capital group has been the primary backer for Oracle’s largest data centre projects in the US, investing its own money and raising billions more in debt to build the facilities. Blue Owl typically sets up a special purpose vehicle, which owns the data centre and leases it to Oracle.”