Palantir CEO Alex Karp (Jemal Countess/Getty Images)

Valuation

Citi on Palantir: Fundamentals are good, but “we continue to have concerns” about valuation

It’s always the valuation.

6/12/25 11:07AM

Citi analysts following Palantir published a new note on the stock after sitting down with CFO David Glazer in New York recently. The upshot?

The business is doing very well, with fast growth expected for the purveyor of AI, data management, and defense-related software services on a number of fronts, from its all-important government contracting business — Uncle Sam is its single largest customer — to international commercial and government sales in the Middle East, to growing corporate uptake of Palantir’s AI platform for commercial clients.

The catch, of course, is the valuation of the shares, where Palantir is an absurd outlier across any range of metrics.

Price to expected 2025 sales? 112x. (Even Tesla, also a wildly popular retail stock and one that trades with little reference to its business fundamentals, has a price-to-sales multiple of just 12x.)
Palantir’s enterprise-value-to-next-12-month-sales multiple? 72x. That’s the kind of valuation you sometimes get on highly speculative penny stocks, not a $320 billion corporate titan.
And on good old-fashioned price to next 12-month earnings, the market gives Palantir a 210x multiple, about 10x the S&P 500’s PE of about 21.5x.

All these figures suggest that by any traditional market rule of thumb, all of Palantir’s — admittedly impressive — growth, and then some, has already been priced in to the shares and extrapolated with overwhelming certainty to continue far into the future.

That’s basically why Citi analysts didn’t make any major changes to their call on the stock after the meeting, keeping their target price on the shares at $115, where it’s been since early May. They wrote:

“The meeting reiterates our upbeat view on PLTR fundamentals, but we continue to have concerns on how stock can grow into its valuation, especially if magnitude of positive revisions slow or large contracts (i.e., Golden Dome) don’t materialize as expected.”

Of course, the Palantir faithful scoff at concerns about valuation. And maybe for good reason: if they had let such concerns about valuation dissuade them from holding the shares, they would’ve missed out on a remarkable gain of 470%(!) in the past 12 months alone.

That’s by far the best performance of the S&P 1500 Index, which captures more than 90% of the US stock market in terms of capitalization.

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Ross Stores surges as Q1 results beat expectations, full-year guidance raised

Ross shares are rising after the company delivered strong Q1 results, with sales topping Wall Street’s projections.

The stock soared 6.3% just after the open.

Key numbers:

Earnings per share of $2.02 vs. $1.47 year over year (estimate: $1.72).
Sales of $6.01 billion, up 21% year over year (estimate: $5.61 billion).
Comparable sales growth of 17% (estimate: 8.58%).

CEO Jim Conroy attributed the results to better traffic in stores. “Customer traffic was the primary driver of the strong sales trend as compelling merchandise assortments, higher customer acquisition and engagement from our ongoing marketing initiatives, and an improved in‑store experience are resonating with shoppers.”

The company also noted that transaction volume grew across all key demographics, including “income levels, ethnicities, and age groups, including younger customers.” Sales were also likely buoyed by standard seasonal tailwinds, including consumer spending from tax refunds.

Backed by the strong quarter, the company lifted its full-year targets. Ross now projects same-store sales growth of 6% to 7%, up from the prior forecast of 3% to 4%, topping Wall Street’s estimate of 4.64%. It boosted its annual EPS guidance to a range of $7.50 to $7.74, versus the prior outlook of $7.02 to $7.36.

Ross Stores has been one of the retail sector’s standout performers this year, rising around 20% year to date as of Thursday’s close.

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Imax surges on report it’s approached entertainment companies for a sale

Imax is on pace for its best trading day since 2021 following a Wall Street Journal report that it’s exploring a sale. Shares are up more than 15% in premarket trading on Friday.

The premium screen company has reportedly approached entertainment companies for a deal, though talks are early and may not come to fruition. Imax has been boosted in recent years by its higher ticket prices — a K-shaped trend in movie theaters — and last year accounted for more than 5% of domestic box office sales.

Theatrical release windows have become a large debate in Hollywood this year, amid the bidding war between Paramount and Netflix for Warner Bros. Discovery. It’s unclear if an entertainment buyer would favor its own films for Imax over a rival’s.

In the first quarter, Imax booked $81.4 million in sales, beating Wall Street expectations but down about 6.5% from last year, when China’s “Ne Zha 2” smashed records.

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AMD rises as CEO forecasts massive 5-year CPU demand growth

AMD’s shares are rising in premarket trading after CEO Lisa Su delivered an optimistic demand forecast, predicting that the global market for CPUs will grow by more than 35% annually over the next five years, according to Nikkei Asia.

“About six months ago or 12 months ago, nobody was talking about CPU shortages,” Su said at an event in Taipei. “But as [AI] inferencing and agentic AI have really started to ramp up, the CPU market [will] continue to grow very much. Over the next five years, we see the CPU market growing at over 35% each year, and this is an area where we’re seeing very strong demand.”

The comments come as the computing demands of AI agents (in particular, the so-called “orchestration” of tasks) increase the need for CPUs in running models.

AMD also said this week it plans to invest more than $10 billion into Taiwan’s AI ecosystem alongside supply chain partners as it ramps production capacity for next-generation AI infrastructure. This investment will support the manufacturing ramp of AMD’s sixth-generation EPYC CPUs, code-named “Venice.”

Su added that CPU supply is now “tight” as inference demand accelerates, while bottlenecks are emerging across memory, power availability, and advanced packaging.

AMD shares have climbed sharply this year amid broader enthusiasm around AI infrastructure spending. The stock has risen more than 100% year to date. During AMD’s last earnings call, management told investors it now sees the server CPU total addressable market reaching $120 billion or more by 2030, according to Yahoo Finance.