Can Palantir’s Valuation Reach the Trillion-Dollar Summit?

The software firm Palantir, currently commanding a price-to-sales multiple exceeding 100, is already priced for perfection. However, according to analysts at Wedbush Securities, this lofty valuation may merely be a stepping stone. In a recent research note, the firm’s experts have charted what they term a "golden path" that could potentially usher the data analytics company into the exclusive trillion-dollar market capitalization club.

All eyes are now on February 2, 2026, when Palantir is scheduled to release its fourth-quarter and full-year 2025 financial results. Market observers will scrutinize whether the company can maintain the "Rule of 40"—a key metric balancing growth and profit margin—to justify its premium valuation. A central factor will be Palantir's demonstrated ability to convert ongoing pilot programs, especially within the rapidly expanding U.S. market, into long-term commercial contracts.

The positive sentiment is further bolstered by recent institutional buying activity. The Louisiana State Employees’ Retirement System, for instance, increased its stake by 2.7% during the third quarter. While the purchase volume is modest relative to daily trading, it signals sustained confidence from long-term, large-scale investors.

Should investors sell immediately? Or is it worth buying Palantir?

The Bull Case: AI Software Leadership

Driving a recent share price surge on Wednesday was an optimistic assessment from Wedbush analyst Dan Ives. He envisions a clear trajectory for the company—currently valued at approximately $415 billion—to reach the $1 trillion milestone. This would represent an upside potential of roughly 140% from current levels.

Ives cites Palantir’s strategic positioning in the AI decision-making software market as the core thesis. Unlike pure-play hardware manufacturers that dominated the initial phase of the AI boom, Palantir operates on the software application layer. The company’s accelerating revenue growth, now demonstrated for nine consecutive quarters, is particularly emphasized. The ongoing CES 2026 in Las Vegas, showcasing numerous AI integrations, is providing additional sector-wide momentum.

Valuation Concerns Linger

Despite the bullish outlook, the current valuation demands caution. With a price-to-sales ratio above 100, Palantir stands as by far the most expensive stock in the S&P 500. Historical data indicates that very few software companies have sustained such valuation levels permanently without undergoing a significant correction. Furthermore, a Relative Strength Index (RSI) reading of 78.8 points to a technically overbought condition, suggesting the possibility of near-term volatility.