Retail Investors Defy Wall Street Warnings to Pour Billions into Palantir

2025-12-25 companies

Denver, Thursday, 25 December 2025.
Ignoring “overvaluation” warnings, retail investors bought nearly $8 billion in Palantir stock in 2025, driving a 150% surge and widening the rift between institutional analysis and market sentiment.

Retail’s $8 Billion Vote of Confidence

The disconnect between institutional caution and retail enthusiasm reached unprecedented levels in 2025, as individual investors poured nearly $8 billion into Palantir Technologies (PLTR) throughout the year [1]. This massive capital injection represents an 80% increase over the prior year and a staggering 400% jump from 2023 levels [1]. While Wall Street analysts have consistently flagged the stock as expensive, retail sentiment has propelled Palantir to become the fifth-most bought security on balance for 2025, trailing only market behemoths like Tesla, Nvidia, and the SPDR S&P 500 ETF Trust [1]. The sheer volume of retail support has driven the stock up more than 150% in 2025 alone, marking its third consecutive year of triple-digit gains [1].

A Historic Performance Gap

This sustained buying pressure has resulted in performance metrics that dwarf broader market indices. Over the last three years, Palantir shares have skyrocketed nearly 3,000%, vastly outperforming the S&P 500’s 80% gain during the same period [1]. This represents a performance differential of 2920 percentage points, highlighting the extraordinary alpha generated for early retail believers. Long-time CEO Alex Karp has emboldened this base, noting that his biggest fans often started as skeptics, while suggesting that those who bet against the company are now regretting their absence from this rally [8].

The Valuation Chasm

However, the financial fundamentals present a picture that continues to alarm traditional analysts. As of the week ending December 8, 2025, Palantir traded at a price-to-sales (P/S) ratio of approximately 127 [5]. For context, market history suggests that no megacap company leading a major technological trend has sustained a P/S ratio above 30 for an extended period [5]. Despite this, Palantir has vaulted to become the 19th-largest publicly traded company on Wall Street as of December 19, 2025, with a market value that exceeds established giants like Coca-Cola by approximately $159 billion [5].

AI: The Fundamental Driver

Beyond market sentiment, the rally is underpinned by tangible developments in artificial intelligence infrastructure. On December 19, 2025, Palantir announced a collaboration with Nvidia and CenterPoint Energy to develop a software platform aimed at accelerating the construction of AI data centers [7]. This partnership places Palantir directly in the center of the critical infrastructure build-out required for the next phase of AI adoption. The company, which provides software platforms like Gotham and Foundry for data integration and intelligence, is increasingly viewed as a primary beneficiary of the AI boom and government efficiency initiatives [1][6].

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Equity valuation Retail sentiment