Is the Worst Finally Over for Palantir Stock?
2026-08-09 05:30
•Lawrence Nga •The Motley Fool
••••• • Axe Cap view
Palantir’s Rally: Worth Chasing or Just Hype?
Palantir’s strong Q2 results lifted sentiment, but pricey valuations keep us cautious.
Palantir’s recent Q2 numbers are impressive—93% revenue growth and nearly 150% growth in US commercial revenue is no small feat. Investors rewarded that with a hefty 25% stock jump, suggesting the market might be warming back up to the AI darling. Yet, South African investors should read this cautiously. Palantir trades at a lofty 66 times sales, a pricey multiple that demands top-notch growth to justify it. If that momentum falters, the share price will likely suffer. For us, the key takeaway is the contrast with local tech plays like Naspers or Prosus, which also have AI exposure but trade on much more reasonable multiples. On currency, a strong dollar tends to keep USD/ZAR elevated, so South African buyers need to factor in rand volatility when looking at purely US-listed tech. this is just our opinion and not financial advice
In South Africa, prefer Naspers and Prosus for AI exposure; avoid Palantir due to valuation risk and forex exposure. Watch USD/ZAR closely as currency swings can amplify gains or losses on US tech stocks.
- Naspers
- Prosus
- USD/ZAR
- Palantir growth slows, hurting valuation
- Strengthening rand reduces US tech returns for ZAR investors
6/10
Palantir Technologies delivered strong Q2 earnings with 93% revenue growth and 149% U.S. commercial revenue growth, prompting a significant 25% stock surge. This marks a shift in investor sentiment, as the market previously responded skeptically to good news due to valuation concerns. The company's accelerating AI platform adoption and raised guidance suggest momentum is intact, though the stock's premium 66x price-to-sales valuation remains a key risk if growth slows.
Our take is based on reporting first published by The Motley Fool.