How Low Could Palantir (PLTR) Stock Go In 2026?

We’re nearing the end of 2025, so it’s now time for pundits and market commentators to make their predictions for what 2026 will bring. I’ve been keeping a close eye on what many of the most prominent minds in the world of finance are suggesting for 2026. What I’ve found so far is a very wide divergence of opinions for the ultimate returns the market will provide investors next year. 

That’s because many who have stayed bullish and continued to predict price appreciation for many high-growth stocks tied to structural growth trends have simply been right in recent years. In fact, the growth we’ve seen not only in top- and bottom-line earnings from many AI companies has been impressive, and there are clear fundamental drivers we need to pay attention to. 

On the other hand, recent weakness among top AI-related growth stocks has been notable, with Palantir (NASDAQ:PLTR) seeing recent bouts of weakness, dropping nearly 30% over a three-week period in November as concerns around AI spending ramped up and investors took profits off the table.

Since then, Palantir’s share price has rallied notably, and this stock looks poised to make another all-time high. So, with this backdrop, it may be dangerous to go against the grain. But I’m among those bears on the stock who think Palantir could have considerable downside in 2026. Here’s my prediction. 

Valuation Concerns Will Really Pick Up

Surging more than 145% on a year-to-date basis at the time of writing, Palantir looks about as robust a growth stock as they come. That’s inclusive of this big data and AI insights company’s recent decline, which again, has been minimized by its recent risk-on rally.

Investors who have stayed invested in companies providing real-world use cases for AI have outperformed those who have stayed on the sidelines. I’m fully willing to admit I’ll be wrong with my forthcoming prediction for Palantir, but that’s what makes markets. We need buyers and sellers for true price discovery. 

I think 2026 will be the year when value investors get their due. Valuations for companies like Palantir have moved beyond the realm of reason, at least in my view. The company’s AIP and Gotham platforms have performed well, and AI has certainly been a tailwind. But the amount that companies and governments ultimately spend on AI solutions for their businesses in 2026 and beyond is a real unknown, and investors are pricing in some very bullish growth rates into their models for PLTR stock and others. 

If AI spending slows, as I’d imagine it likely will in the event of a market pullback, Palantir’s forward price-sales and price-earnings ratios of 125-times and 192-times, respectively, could come under significant pressure. 

It’s Going to Be Very Difficult for Palantir to Grow Into this Valuation

As I pointed out in a recent piece, some truly earth-shattering growth will be needed in order for Palantir to justify its current valuation, never mind see growth from here. 

The thought experiment I did, which tries to estimate the revenue growth that would be needed in order for PLTR stock to make sense 25 years (a quarter century is a long time) in the future would imply 1,500% total revenue growth over this period. In other words, Palantir would need to double its top-line revenue roughly five times over the next 25 years, or grow at a 35% rate consistently over this period of time.

Growing at such a rate for a quarter century consistently is exponentially difficult the larger a company gets, and most investors will plug smaller growth rates into their models over time. Thus, there’s some very large up-front growth rates being baked into this stock. That means that a single earnings miss (or even a miss on the whisper numbers) could drive a cascade lower for this stock, which I’d argue is priced for perfection. 

So, How Much Downside Could Palantir Have?

Currently growing its revenue at a 63% pace this past quarter, bolstered by the fastest Capex spend we’ve seen in decades among large-cap tech stocks, I don’t think an average 35% revenue growth rate over the next quarter century is possible to pencil out.

And while it’s possible for Palantir to see outsized growth in the coming quarters (meaning more share price appreciation in 2026), I think even one quarterly miss out of four could have an outsized impact on this stock as I think valuation contraction is more likely than valuation expansion in 2026.

By base case is a minimum 25% drawdown in PLTR stock in 2026, with my most bearish scenario cutting this AI player in half from current levels. That said, there are other Wall Street analysts who are more bearish than I, with the low price target on PLTR stock sitting at $50 per share pricing in nearly 75% downside from here. I’m more akin to this price target level than the consensus estimate on Palantir, which suggests downside of around 3% from here. That’s too low, in my view.