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Retail Money Floods Into Palantir

While Wall Street debates whether Palantir’s stock has run too far, retail investors have already made up their minds. Individual traders have poured billions of dollars into the defense and data analytics company in 2025, according to data from VandaTrack, cementing Palantir’s status as one of the most heavily bought stocks among everyday investors.

The buying spree has continued despite persistent warnings from analysts about valuation. For retail traders, Palantir’s explosive growth, association with artificial intelligence, and bold corporate vision outweigh concerns about traditional multiples.

A Stock That Keeps Delivering Eye Catching Returns

Palantir has delivered extraordinary gains. Shares are up more than 150 percent so far in 2025 and nearly 3,000 percent over the past three years. That performance dwarfs the broader market, with the S&P 500 gaining roughly 80 percent and the Nasdaq Composite rising just over 120 percent during the same period.

Since going public in 2020, Palantir has steadily evolved from a misunderstood government contractor into one of the most closely watched names in the AI trade. The stock’s momentum has placed it among the top five most purchased securities by retail investors this year, trailing only giants such as Tesla, Nvidia, and broad market ETFs like the SPDR S&P 500 ETF Trust.

Billions in Net Buying Signal Retail Conviction

VandaTrack data shows individual investors were on pace to buy nearly 8 billion dollars of Palantir shares on a net basis in 2025 as of early December. That represents more than an 80 percent increase from the prior year and a surge of over 400 percent compared with 2023.

According to Vanda’s research team, Palantir has effectively joined the short list of stocks that define the current AI investing narrative. Retail participation was strongest in the first nine months of the year, though buying slowed later as fears of an AI valuation bubble briefly rattled the sector.

Why Individual Investors Believe in the Business

For many retail investors, Palantir’s appeal goes far beyond price charts. The company’s core business centers on helping governments and enterprises organize, analyze, and operationalize massive data sets. Its platforms are used across defense, intelligence, healthcare, manufacturing, and consumer facing industries.

Some investors also see Palantir as a beneficiary of political and economic trends, including increased defense spending and renewed focus on government efficiency. Research into the company reveals a client base that extends well beyond military contracts, including partnerships with globally recognized brands such as Ferrari and Wendy’s.

That breadth has surprised many first time investors who initially viewed Palantir as a niche defense contractor rather than a diversified data intelligence company.

Retail Investors Embrace the Volatility

Palantir’s stock has not moved in a straight line. The shares dropped 16 percent in November after third quarter earnings, marking the company’s worst monthly performance in more than two years as investors rotated out of AI stocks on valuation concerns.

Instead of scaring off retail investors, the pullback attracted new buyers. Many saw the decline as a rare opportunity to add exposure at lower prices. For long term believers, short term volatility has become part of the experience rather than a reason to exit.

A Company That Actively Courts Its Small Shareholders

Unlike many large public companies, Palantir has leaned into its retail following. The company allows retail investors to ask questions during earnings calls and regularly acknowledges their support publicly.

CEO Alex Karp has gone so far as to directly thank individual shareholders in unconventional appearances, reinforcing the sense that retail investors are partners rather than spectators. This approach has helped build loyalty and turned Palantir into a frequent topic on online investing forums.

On Reddit’s WallStreetBets, Palantir has repeatedly ranked among the most discussed stocks of 2025. Analysts who track meme stock behavior describe it as one of the forum’s longest running favorites.

Wall Street Remains Skeptical

Institutional investors have not shared the same enthusiasm. The average analyst rating on Palantir remains a hold, with valuation cited as the primary concern. At roughly 450 times trailing earnings, Palantir trades at a multiple far above the S&P 500 average, which sits near 28.

Some analysts argue the stock is effectively uninvestable for large funds constrained by valuation discipline. Others acknowledge the strength of Palantir’s earnings growth and rising guidance but remain cautious about how much optimism is already priced into the shares.

Echoes of Tesla’s Early Days

Several analysts have drawn parallels between Palantir today and Tesla a decade ago. At the time, Tesla was widely criticized for its valuation and dismissed as speculative, even as retail investors embraced its long term vision. Tesla shares have since risen roughly 3,000 percent over ten years, far outperforming the broader market.

Supporters of Palantir believe a similar story could unfold if the company continues to execute and expand its AI capabilities. Critics argue that the comparison assumes flawless execution and sustained market enthusiasm.

The Debate Continues

High profile skeptics have not gone unnoticed. Michael Burry’s former Scion Asset Management disclosed bearish positions against Palantir earlier this year, reigniting debate over whether the stock’s valuation is justified. Karp publicly dismissed the move, underscoring the growing divide between institutional caution and retail conviction.

For retail investors, that divide is part of the appeal. Where Wall Street sees excess, individual traders see opportunity.

Conviction Over Consensus

Despite sharp swings and persistent warnings, retail investors remain committed. Many say they have become accustomed to volatility and view price drops as chances to build positions in a company they believe is shaping the future of data and AI.

Whether Palantir ultimately proves to be overvalued or visionary remains an open question. What is clear is that retail investors are not waiting for Wall Street’s approval. They are already all in.