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Palantir stock price has had a wild ride in the third quarter of 2025. The stock rose more than 100% year-to-date. It hit an all-time high of over $190 in mid-August, thanks to strong earnings figures and excitement about the AI market. But since then, the stock has been in a correction phase. It lost 12%–16% of its value during a 6 day losing streak, which goes to show that its AI trade is not as strong as it seems. PLTR is trading at about $157 as of this writing, after recovering some of its earlier losses. Palantir (PLTR) has had a good run in the last year year, with gains of 390% in that time. Investors are nonetheless worried about the stock's high price as they look ahead to the fourth quarter and beyond. Q3 2024 Performance and Key Fundamentals Palantir stock price propulsion has been primarily down to impressive Q3 results, which exceeded analysts' forecasts for both revenue and earnings. Revenue climbed by 30% year-on-year, thanks to its U.S. business that grew by 44%.The company's concentration on its Artificial Intelligence Platform (AIP) has been a major factor in its success. Palantir Stock Price Movement and Performance Palantir stock price has gone up substantially over the past year, and their one-year return is higher than that of both the U.S. AI market as a whole and the software industry. Equally important is that the stock’s current recovery shows that investors are quite confident and that they want to buy when the price drops. From a technical analysis point of view, Palantir stock price has been in a rising trend channel for the past few months, and the recent decline has not dented its traction much. That is a clear sign of strong momentum and growing interest from investors. The stock is still trending upwards, despite its significant volatility in recent days. Financial Health & Structural Fundamentals Revenue growth: Palantir is launching into Q3 with top-line momentum and is expected to continue scaling rapidly. Profitability and cash: Q2 results showed outstanding margins and strong cash flow—allowing flexibility to invest, while preserving strength on the balance sheet. Valuation caveat: The stock trades at a lofty 214× forward earnings, far above the S&P 500 average of 22×, raising concerns about valuation sustainability. Strategic positioning: Palantir holds entrenched government contracts (e.g., a $10 billion U.S. Army deal), and growing commercial engagement validates its AI-driven platforms. Cash reserve: Strong liquidity (~$6B) and booked future contracts give it strategic optionality and resilience. Technical Outlook The stock hit a high of about $190 and has now fallen back to about $157, which is a significant correction from overbought levels. Generally, a breakout from a rising wedge pattern is a good sign, but there's a good chance it could soon return to overbought territory. Outlook for Q4 2024 and Risks Palantir's management has given a bullish assessment for Q4 2025. Palantir estimates that in the fourth quarter, its sales will be between $767 million and $771 million. In addition, it forecasts its adjusted operating income to be between $298 million and $302 million. The company's continuous growth in both the government and corporate sectors, especially through its AI-driven platforms, is likely to be the main driver of growth. Strategic partnerships, like the one with defense company L3Harris, make its position in important markets even stronger. Catalysts & Tailwinds Palantir stock price will get fresh impetus when the company releases its Q3 earnings, anticipated in early November: If they beat high guidance levels, it could bring back momentum buyers and support high valuations. Conversely, weak numbers could trigger a significant correction. Major contract ramp-up: More big wins, especially in the corporation world, could cement its growth story. AI sector sentiment: Investors will be very interested in AI stocks. PLTR price will benefit if the overall tech outlook is good and Nvidia and other AI bellwethers are clear about their plans. Risks and Headwinds Valuation threat: The stock is sensitive to even little mistakes in earnings or outlook since its valuation is stretched. High-growth tech stocks can be hurt more than others by macro volatility from factors like interest rate policy and inflation. AI Market Skepticism: A recent paper from MIT and a statement from OpenAI caution against the sustainability of AI monetization in the long-term. If sentiment shifts again, PLTR may under more pressure. Technical breakdown: If critical support levels at 50-day MA ($154) aren't held, it could lead to bigger corrections. In Summary Palantir stock has shown us in recent days that it is not as strong as previously thought. An objective outlook at its valuation shows that it is currently overvalued, and that leaves little room for error. Nonetheless, the AI sentiment has proven irresistible to investors (so far) and a continuation of the same will likely keep PLTR on the ascent. However, the company's order book and its forthcoming earnings release in November will likely have the strongest bearing on its stock price performance in the medium-term.