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Sat, May 10, 2025, 9:59 AM 2 min read
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Appearing on Yahoo Finance in the wake of Palantir Technologies (PLTR)'s first quarter earnings report, Third Bridge Forum Senior Analyst Jordan Berger explained why he believes that Palantir Technologies (PLTR) has such an extraordinarily high price-to-earnings ratio at this point.
The stock's forward P/E ratio was about 230 times as of early afternoon trading on May 6.
A Huge Opportunity and Excellent Execution
Palantir Technologies (PLTR) has a "high valuation (partly) because the opportunity within the AI market is big, and there are not a lot of pure-play vendors" in the AI software sector, Berger asserted.
Moreover, the company has been "able to execute well in a sustained manner," he said.
The latter point differentiates Palantir Technologies (PLTR) from many of its peers that have not been able to perform impressively over the longer term, according to Berger.
He added that Palantir had executed well again in Q1.
The Recent Price Action of PLTR Stock
In the last month, the shares have gained 37%, while they have climbed 2.5% in the last three months and risen 41% so far in 2025.
While we acknowledge the potential of PLTR, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than PLTR but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
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