Wall Street wrote off Palantir as too expensive. Retail investors can’t get enough

Kyle Dijamco is a proud member of Palantir Applied sciences‘ fast-growing retail investor base.

The Los Angeles-based marketer has wager large on the protection tech inventory, even growing his publicity after a drawdown earlier this yr. The 31-year-old’s place now stands at roughly $25,000.

“It is an thrilling inventory to personal,” Dijamco informed CNBC.

Dijamco is a part of a military of mom-and-pop merchants who’ve poured billions of {dollars} into the Denver-based firm’s shares in 2025, in keeping with information from VandaTrack. Its monster beneficial properties over current years amid the substitute intelligence growth has made the inventory an indeniable star of the retail investing world, despite Wall Avenue’s reservations about valuation.

Particular person traders had been on observe to purchase practically $8 billion in Palantir inventory on stability in 2025, per Vanda information as of Dec. 8. That could be a acquire of greater than 80% over the prior yr, and it displays a rise of over 400% from 2023.

Palantir is on tempo to be the fifth-most purchased safety on stability for the yr, Vanda information exhibits. The inventory sits behind solely megacap names like Tesla and Nvidia and widespread exchange-traded funds such because the SPDR S&P 500 ETF Belief (SPY), which tracks your complete U.S. market benchmark.

“It has been nice,” stated Viraj Patel, deputy head of analysis at Vanda, which tracks retail dealer flows. ​​”Palantir has sort of been introduced into this group of AI-tech poster [children].”

Palantir has gained the hearts of retail traders amid its takeoff as a inventory. Its shares have surged greater than 150% to this point in 2025, inserting the identify on observe for its third straight yr with triple-digit beneficial properties.

The inventory has skyrocketed practically 3,000% within the final three years, crushing the S&P 500‘s roughly 80% acquire and the technology-heavy Nasdaq Composite‘s greater than 120% climb in the identical time-frame.

Since its 2020 market debut, Palantir has been thought of a mysterious enterprise given its enterprise with each private and non-private entities.

On the floor degree, Palantir helps each governments and main firms set up their information. Past being considered as a beneficiary of the push to undertake AI, it is seen as a winner below the Trump administration’s priorities of accelerating federal authorities effectivity and bolstering nationwide protection.

“The joke for some time has at all times been like, ‘What does Palantir even do?'” stated Paxton Earl, an funding banker with a deal with software program who started studying regulatory experiences to higher perceive the corporate. After studying extra, he remembers considering: “That is truly an insane enterprise. It is actually good.”

Earl found via analysis that the corporate’s income was extra diversified past navy work than he initially predicted. As well as, the 23-year-old discovered Palantir labored with consumer-facing manufacturers he knew like Ferrari and Wendy’s.

The San Diego resident stated he picked up extra shares following the corporate’s third-quarter earnings report in early November. Palantir tanked 16% that month as traders dumped their AI performs on valuation fears, and the inventory posted its worst month-to-month efficiency in additional than two years.

Wall Avenue largely chalked up the sell-off to profit-taking and broader issues concerning the well being of the AI commerce. Vanda discovered the majority of Palantir’s retail shopping for occurred within the first 9 months of the yr, then cooled off as rising fears of an AI bubble left traders questioning the commerce.

Palantir has gone out of its technique to courtroom particular person merchants like Earl.

Whereas different well-known firms sometimes reserve the question-and-answer parts of earnings requires Wall Avenue analysts or journalists, Palantir additionally takes inquiries from retail traders. In an annual video shared from a ski path late final yr, CEO Alex Karp particularly shouted out these small shareholders.

“Exceedingly grateful to all of you particular person traders who took the time and alternative, and had the braveness to look previous typical, rusty, crusty platitudes,” Karp stated, whereas was sporting reflective goggles and gripping ski poles.

The inventory has turn out to be a scorching matter on the favored WallStreetBets Reddit discussion board. On a number of days in 2025, it was probably the most talked about inventory on the dialogue board, in keeping with meme inventory monitoring agency Breakout Level.

Palantir “has been a long-standing WallStreetBets romance,” stated Ivan Ćosović, managing director at Breakout Level. “They adore it.”

Wall Avenue hasn’t jumped on board with the identical fervor as the common Joe. The typical analyst polled by LSEG has a maintain score, with a number of citing apprehension concerning the inventory’s a number of.

The corporate’s valuation has made its inventory a “non-starter” for institutional shoppers, in keeping with Gil Luria, head of expertise analysis at D.A. Davidson. Palantir has a a number of of round 450 instances trailing earnings, working circles across the S&P 500’s common of shut to twenty-eight.

However, Luria stated retail traders are seemingly impressed by Palantir’s “formidable” mission to play a job in defending the U.S. These on a regular basis traders are seemingly additionally enticed by Karp, who Luria stated is much like Tesla CEO Elon Musk in his capability to promote a enterprise imaginative and prescient. Nevertheless, Luria stated Karp hasn’t attracted the identical quantity of controversy.

Luria stated Palantir additionally attracts parallels to Tesla’s inventory 10 years in the past, when the carmaker was presenting an electrical vehicle-focused future. Tesla shares have soared about 3,000% previously decade, whereas the S&P 500 has gained greater than 230% in the identical interval.

The query, Luria stated, is that if the retail crowd who backed Tesla a decade in the past are proper as soon as once more about Palantir.

The analyst stated Palantir’s earnings outcomes have been largely robust over the past a number of years. Palantir’s second-quarter report in August — through which the corporate topped the Avenue’s estimates and raised its full-year steering because of the AI growth — left him questioning if the inventory is value leaping into regardless of the lofty a number of.

“Even us most jaded, outdated, stodgy Wall Avenue analysts had been bowled over by the extent of success,” Luria stated. “It was such a staggering success that I needed to rethink all the pieces I knew.”

Scion Asset Administration — the now-de-registered fund run by “The Massive Quick” investor Michael Burry — revealed bets towards Palantir and fellow AI darling Nvidia within the third quarter. Karp informed CNBC that Burry’s transfer was “bats— loopy.”

Retail traders are undeterred by the wariness amongst their institutional counterparts. As Breakout Level’s Ćosović put it: the place Burry sees “overvaluation,” WallStreetBets sees “future.”

Palantir has had its justifiable share of choppiness this yr, falling greater than 10% on a number of single buying and selling days. However for stakeholders like Dijamco, the California-based marketer, these fluctuations present cheaper entry factors to purchase into a reputation that they consider in.

“You sort of turn out to be a bit of bit desensitized to the worth swings,” stated Dijamco, who plans to buy hundreds of {dollars}’ value of further shares on the following large downturn. “I simply have that conviction that it will do effectively.”