Palantir Technologies Inc (NASDAQ: PLTR) is already “one of the hottest stocks” but renowned investor Jim Cramer believes it could extend gains further in the coming weeks.
The big data analytics firm is scheduled to report its second-quarter earnings on August 4, which could serve as a meaningful near-term catalyst for PLTR shares, he argued in a recent segment of “Mad Money”.
Palantir stock has been in a sharp uptrend over the past four months and is currently up more than 100% versus its low in the first week of April.
Why is Jim Cramer keeping bullish on Palantir stock?
Despite an explosive move to the upside in PLTR shares in recent months, the former hedge fund manager remains convinced they still have meaningful room to push further up.
According to Jim Cramer, a blowout earnings release on Monday (after the bell) could “smoke the shorts” as Palantir stock has “an almost cultlike shareholder base led by the messianic Alex Karp.”
Cramer is keeping constructive on the AI stock mostly because it’s “growing like a weed,” winning “ton of business and repeat business from everything, from consumer package goods to the federal government.”
However, shares of the Denver-headquartered firm don’t currently pay a dividend and, therefore, remain unattractive for income investors in the second half of 2025.
Is valuation still a concern for PLTR shares ahead of earnings?
Palantir Technologies is broadly expected to report 8 cents a share of earnings for its fiscal second quarter on August 4th, according to data from Barchart.
This would mean an exciting 166% annualised growth versus the same quarter last year, reiterating that the Nasdaq-listed firm is growing at a rather fast clip.
However, Palantir stock’s overly stretched valuation remains a meaningful concern for investors.
At the time of writing, Palantir shares are going for a forward price-to-earnings multiple of well over 400 – alarmingly above other major AI stocks, even including Nvidia at about 44 only.
This could lead to some pullback after the Q2 earnings release this evening, especially if markets deems the company’s report anything less than an absolute blowout.
Should you buy Palantir shares for the second half of 2025
In short, while Palantir has undeniably captured investor enthusiasm with a rapid ascent and AI-driven narrative, its earnings today will serve as a critical litmus test for its valuation premium.
With expectations running high and the stock trading at a forward P/E multiple that dwarfs even industry giants like Nvidia, any hint of underperformance could trigger a swift revaluation.
Still, Palantir’s deep ties to the US government, expanding commercial footprint, and charismatic leadership continue to fuel bullish sentiment.
Whether PLTR shares can justify its lofty valuation or faces a reality check, Monday’s report may set the tone for its trajectory in the second half of 2025 – and possibly beyond.
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