Palantir Technologies (NASDAQ:PLTR) has experienced impressive growth, with its stock entering the top 20 on Barchart’s “Top 100 Stocks to Buy.” This marks a significant milestone, especially after a volatile period that saw the stock peak at $125.41 in February, then drop back to the $70s. Despite these fluctuations, Palantir stock has regained momentum, rising 27% since March 10, 2025, and its recent results have fueled optimism among investors.

In this article, we explore the reasons behind Palantir’s stock surge and whether now is the right time for aggressive investors to consider buying PLTR.

Palantir’s Impressive Valuation and Growth

One of the most discussed topics surrounding Palantir stock is its valuation. With a market capitalization of approximately $226.91 billion, PLTR’s price-to-adjusted free cash flow (P/AFCF) ratio has increased significantly over the past few years. This makes it appear overvalued at first glance, but a closer examination of its financials reveals a promising growth story.

Palantir’s adjusted free cash flow (AFCF) has surged in the last year. In Q4 2024, AFCF reached $517 million, an increase of 70% from the previous year, with a remarkable 63% margin. This robust performance helped the stock gain 22% in a single day after the earnings report was released in early February 2025. With $1.25 billion in AFCF for the year, the company is poised for continued expansion.

The company’s growth trajectory shows no signs of slowing down, and its increasing free cash flow supports a higher valuation despite its high P/AFCF ratio. This makes Palantir an attractive prospect for investors who are bullish on its long-term potential.

AI and Data Analytics Driving Growth

Palantir’s focus on artificial intelligence (AI) and data analytics is one of the main catalysts for its growth. As businesses increasingly rely on data-driven insights, Palantir is positioned to benefit from the expanding market for AI and big data solutions. Its software is used by government agencies, defense contractors, and private companies, making it a leader in the field.

AI-driven solutions, especially in areas like machine learning and predictive analytics, are integral to Palantir’s business. As industries adopt AI technologies, Palantir stands to gain significantly, which could push its stock value even higher in the coming months.

Palantir Stock Options Strategy for Aggressive Investors

For those willing to take on higher risk, Palantir stock offers opportunities through options trading. One popular strategy is the “Covered Strangle,” which involves buying stock at current prices, selling an out-of-the-money (OTM) call option, and selling an OTM put option with the same expiration date. This strategy allows investors to generate income while positioning themselves to benefit from potential stock price movements.

Using Palantir as an example, an investor could buy 100 shares at $96.75 per share, sell a call option with a $130 strike price, and sell a put option with a $77 strike price. This would generate a maximum potential profit of $34.84 per share if the stock rises to $130, while the maximum loss would be $172.16 per share if the stock drops to $0. Although the strategy requires a high tolerance for risk, it could be a way to enter Palantir stock at a favorable price while collecting premiums from the options.

Palantir Stock’s Long-Term Potential

With a strong track record of free cash flow growth, expanding AI and data analytics capabilities, and increasing demand for its products, Palantir is well-positioned for long-term growth. The stock’s volatility over the past year has been significant, but it has also shown a remarkable ability to bounce back, reflecting investor confidence in its future prospects.

Aggressive investors who are comfortable with high-risk strategies may find Palantir stock to be an attractive option. While the stock’s valuation remains high, the company’s strong financials and the growing demand for AI and data analytics make it a solid candidate for future growth.

Conclusion

Palantir Technologies (PLTR) stock has proven to be a resilient investment, surging into the top 20 on Barchart’s list of “Top 100 Stocks to Buy.” With its strong free cash flow growth, focus on AI and data analytics, and aggressive options strategies, Palantir offers significant upside potential. While its valuation is high, its financial performance and growth prospects make it a solid choice for investors who are willing to take on some risk.

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