This Is the Most Hated Tech Stock on Wall Street Right Now, and I Think It's a Buy

Key Points
Palantir’s robust revenue growth and strong cash flows highlight accelerating demand.
Some Wall Street analysts remain concerned about its elevated valuation.
The company’s AIP platform and rising government adoption are positioning it as a crucial player in real-world AI deployment.
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Palantir Technologies (NASDAQ: PLTR) may be one of the most polarizing stocks in the market today. Though it's one of the most prominent artificial intelligence (AI) software businesses, analyst sentiment toward it remains surprisingly mixed. Out of the 28 analysts covering the stock, 17 rate it a buy, nine a hold, and two a sell.
While this does not indicate outright pessimism, it shows that a meaningful number of Wall Street analysts remain unconvinced that the stock has upside potential despite the company's exceptional business momentum. This disconnect between sentiment and fundamentals is exactly what makes the stock interesting today.
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Why is Wall Street concerned?
The biggest concern about Palantir among investors is its extremely steep valuation. The company trades at over 82 times forward 1-year earnings, which is expensive even for a high-growth company. That alone has made many analysts cautious, limiting their upgrades despite the business' improving performance.
But the concerns go beyond that. Palantir's expanding role in handling sensitive government and financial data is also drawing scrutiny. A recent United Kingdom contract giving the company access to highly sensitive financial regulatory data has sparked privacy and ethical concerns.
Palantir also does not behave like a typical software-as-a-service (SaaS) company. Instead, its revenue is driven by large and complex contracts with government and commercial organizations. Hence, analysts find it difficult to accurately model its future revenues.
Strong business momentum
Palantir, however, is demonstrating exceptional business momentum. The company's top line grew by 70% year over year in the fourth quarter, its fastest growth as a public company. This growth is not coming at the cost of profitability. In the fourth quarter, Palantir reported a GAAP net income margin of 43%. In 2025, it generated over $2.2 billion in adjusted free cash flow.
It closed deals with a total contract value of $4.3 billion in the fourth quarter. The company also exited the quarter with $4.2 billion of remaining performance obligations (a measure of contracted backlog), up 144% year over year. These numbers highlight the robust demand trends for the company's platform. The company's net dollar retention was 139%, highlighting the increasing use of its platform by its established customers.
Its Artificial Intelligence Platform (AIP) has become a key growth engine. The company's U.S. commercial business grew 137% year over year in Q4 as companies are increasingly shifting from AI experimentation to full-scale deployment.
The company is also gaining increasing importance in the U.S. defense sector. The Department of Defense is moving to designate its Maven AI system as a formal "program of record," according to a Reuters article. This move will embed the platform into long-term military operations and help it secure dedicated funding.
Competitive advantage
Palantir is helping governments and organizations deploy AI to address real-world challenges. As AI models become increasingly commoditized, value is shifting toward companies that can operate them at scale. Palantir's AIP and Ontology framework (which helps represent a client's physical assets, processes, and relationships digitally) are playing a crucial role in enabling enterprises to integrate AI into decision-making and operations.
Hence, even when Wall Street worries about its valuation, Palantir could remain a smart stock pick so long as it continues to execute at its current pace.
Should you buy stock in Palantir Technologies right now?
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Manali Pradhan, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.