Wall Street wrote off the stock as too expensive. Retail investors can’t get enough
Stick Pictures | Light Rocket | Getty Images
Kyle Dijamco is a proud member Palantir Technologies‘A rapidly growing retail investor base.
The Los Angeles-based marketer has invested heavily in defense technology stocks, even increasing his exposure after the decline earlier this year. The 31-year-old player’s position currently stands at approximately $25,000.
“This is an exciting stock to own,” Dijamco told CNBC.
Dijamco is part of an army of casual traders pouring billions of dollars into the Denver-based company’s shares in 2025, according to data from VandaTrack. Its massive gains in recent years amid the AI boom have made the stock an undisputed star of the retail investing world, despite Wall Street’s reservations about its valuation.
Retail investors were on track to purchase approximately $8 billion worth of Palantir shares in 2025, according to Dec. 8 Vanda data. This reflects a gain of more than 80% from the previous year and an increase of over 400% from 2023.
According to Vanda data, Palantir is on track to become the fifth most purchased security on balance this year. Stock stands behind only megacap names Tesla’s And Nvidia and popular exchange-traded funds. SPDR S&P 500 ETF Trust (SPY)It follows the entire US market comparison.
“It was great,” said Viraj Patel, vice president of research at Vanda, which tracks retail trader flows. “Palantir has been sort of included in the AI technology poster group [children]”
‘Crazy’ job
Palantir won the hearts of retail investors following its stock rally. Its shares are up more than 150% so far in 2025, putting the company on track for its third straight year of triple-digit gains.
The stock has crushed the market, rising nearly 3,000% in the last three years. S&P 500roughly 80% profit and technology-oriented Nasdaq CompositeThere was an increase of more than 120% in the same time period.
Comparison of Palantir with S&P 500 and Nasdaq Composite, 1-year chart
Palantir has been viewed as a mysterious organization given its work with both public and private organizations since its launch in 2020.
On a superficial level, Palantir helps both governments and large corporations organize their data. Beyond being seen as a beneficiary of the push to embrace artificial intelligence, it is seen as a winner under the Trump administration’s priorities of improving the efficiency of the federal government and strengthening national defense.
“The joke for a while has always been ‘What is Palantir doing?'” said Paxton Earl, a software-focused investment banker who began reading regulatory reports to better understand the company. “It was like that,” he said. After learning more, he remembers thinking: “This is actually a crazy business. It’s really good.”
During research, Earl discovered that the company’s revenue was more diversified beyond military business than he had initially anticipated. Palantir, 23, was also working with consumer-facing brands he knew. Ferrari And Wendy’s.
The logo of US software company Palantir Technologies is seen in Davos, Switzerland, on January 22, 2020.
Arnd Wiegmann | Reuters
The San Diego resident said he bought more shares after the company’s third-quarter earnings report in early November. Palantir tumbled 16 percent that month as investors abandoned AI plays to valuation fears, giving the stock its worst monthly performance in more than two years.
Wall Street largely attributed the selloff to broader concerns about profit-taking and the health of AI trading. Vanda found that the bulk of Palantir’s retail acquisitions occurred in the first nine months of the year, then calmed down as growing fears of an AI bubble caused investors to question the trade.
A retail ‘romance’
Palantir did its best to take individual traders like Earl to court.
While other well-known companies usually reserve Q&A sections While earnings call on Wall Street analysts or journalists, Palantir is also fielding questions from individual investors. In an annual video shared from a ski slope late last year, CEO Alex Karp specifically addressed these smaller shareholders.
“I am extremely grateful to you individual investors who took the time and the opportunity and had the courage to go beyond the traditional, rusty, crusty platitudes,” Karp said while wearing reflective goggles and clutching ski poles.
Stock has become a hot topic on popular WallStreetBets reddit Forum. Meme was the most mentioned stock on the discussion board for several days in 2025, according to stock tracking firm Breakout Point.
Breakout Point general manager Ivan Ćosović said Palantir “has a long-standing WallStreetBets romance.” “They love it.”
Big money hesitation
Wall Street didn’t get into it with as much enthusiasm as the average Joe. The average analyst surveyed by LSEG has a hold rating, with a few quotes Concern that the stock is multiple.
The company’s valuation has made its shares a “non-starter” for institutional clients, according to Gil Luria, head of technology research at DA Davidson. Palantir is running circles around the S&P 500’s near-28 average, trading for about 450 times earnings.
On the other hand, Luria said retail investors were likely attracted by Palantir’s “ambitious” mission to play a role in defending the United States. These ordinary investors were also probably seduced by Karp, whom Luria said was similar. Tesla’s CEO Elon Musk’s ability to sell his business vision. But Luria said Karp hasn’t attracted the same amount of controversy.
Alex Karp, CEO of Palantir Technologies Inc., speaks at the AIPCon conference on March 13, 2025 in Palo Alto, California, USA.
David Paul Morris | Bloomberg | Getty Images
Luria said Palantir also shares similarities with Tesla’s shares 10 years ago, when it presented an electric vehicle-focused future. Tesla shares have gained nearly 3,000% over the past decade, while the S&P 500 has gained more than 230% over the same period.
The real question, Luria said, is whether the retail audience that supported Tesla a decade ago is right about Palantir once again.
Palantir’s earnings results have been largely strong over the past few years, the analyst said. Palantir’s second-quarter report in August, in which the company beat the Street’s estimates and raised its full-year guidance due to the AI boom, caused some to question whether the stock was worth jumping on despite the high multiple.
“Even the most jaded, old and stodgy of Wall Street analysts were stunned by the level of success,” Luria said. “It was such an astonishing success that I had to reexamine everything I knew.”
Scion Asset Management, the now-deregistered fund run by “The Big Short” investor Michael Burry, revealed bets against Palantir and its AI companion Nvidia in the third quarter. Karp told CNBC that Burry’s move was “crazy as bats.”
Overvaluation or fate?
Individual investors remain undeterred by the caution of their corporate counterparts. As Breakout Point’s Ćosović puts it: Where Burry sees “overvaluation,” WallStreetBets sees “destiny.”
Palantir has seen its share of fluctuations and declines this year more than 10% on multiple single trading days. But for stakeholders like California-based marketer Dijamco, these swings provide cheaper entry points into buying a name they believe in.
“You’ve become a little desensitized to price fluctuations,” said Dijamco, who plans to buy thousands of dollars’ worth of additional shares in the next big downturn. “I just have faith that it will be okay.”
