Palantir (PLTR) shares have been in a sharp downtrend in recent sessions amid a broader selloff in high-flying artificial intelligence (AI) stocks due to valuation concerns. 

Despite the aforementioned pullback, Palantir stock is going for a forward price-sales (P/S) ratio of about 90x, effectively making it the most expensive tech stock in the second half of 2025. 

However, PLTR shares down nearly 20% versus their recent high still offer ample reasons to buy, at least for high-risk investors comfortable with looking beyond valuation.  

Palantir Stock Is Crucial for AI Integration

Palantir is absolutely indispensable for all businesses interested in integrating artificial intelligence into their operations, argued Tyler Radke, a research analyst at Citi in a CNBC interview today. 

According to him, every organization in the world must get its data in order before it can proceed with deploying an AI model or application, and that’s where PLTR steps in. 

Palantir shares have done exceptionally well in 2025 because that’s a fairly durable “moat.” 

In fact, it helped the company record “one of the biggest beats and raises we have seen from a public company” on Aug. 4, Radke added. 

PLTR Shares Lack Serious Competition

PLTR stock remains an attractive long-term holding also because it lacks serious competition. 

“There doesn’t appear to be an obvious competitor who can organize your data as efficiently,” the Citi analyst agreed on “Squawk Box.”

In short, Tyler Radke views Palantir Technologies as a unique combination of a software and a services firm that’s in a league of its own, at least for now. 

Note that his peers at Wedbush believe Palantir shares are headed to join the coveted trillion-dollar club and say that looking at valuation alone is recipe for missing “every transformational tech stock rally.”

Wall Street Remains Cautious on Palantir

For other Wall Street firms, however, valuation concerns remain a dealbreaker when it comes to investing in PLTR shares. 

According to Barchart, the consensus rating on Palantir stock currently sits at “Hold” only with the mean target of about $156 roughly in line with the price at which it’s already trading on Thursday.