Palantir's P/E of 600: The Truth Behind the Overvaluation Debate

📉 Palantir: At the Center of the Overvaluation Controversy

Palantir's stock recently entered correction territory with a 16% decline in just one month. This happened despite recording all-time high results in Q3. Why did this occur?

The Shocking P/E Ratio

Palantir's P/E (Price-to-Earnings ratio) once exceeded 600. What does this mean?

💡 A P/E of 600 means that at current earnings levels, it would take 600 years to recover your investment.

It was even evaluated as having the highest P/E among all Nasdaq-listed stocks.

🐻 Michael Burry's Short Attack

Michael Burry, the investor made famous by the movie "The Big Short," recently disclosed short positions (put options) on Palantir and NVIDIA in his Q3 filing.

When this news broke:

Palantir stock took a hit
NVIDIA was also affected
Overvaluation concerns reignited

Current Stock Situation

Category	Value
Peak P/E	Over 600
Current P/E	~300s
Fair Value (chart-based)	~$150
Target Price	~$200

🤔 Why Won't the P/E Normalize Easily?

No matter how fast Palantir grows, normalizing the current P/E isn't easy.

Growth Rate Simulation

Scenario: 50% growth next year → 50% growth the following year

Result: The P/E doesn't decrease as much as you'd expect.

Peter Lynch's Investment Principle

Legendary investor Peter Lynch said:

"Don't invest if the PEG (P/E ÷ Growth Rate) is above 1-2"

Palantir's current PEG is estimated at about 6 or higher. By Peter Lynch's standards, that's an extremely high figure.

💼 Palantir's Business Overview

Main Products

Government Sector - Gotham

For government and military agencies
Data analytics and intelligence platform
Stable revenue base

Commercial Sector - Foundry

Enterprise data platform
Growing rapidly
Key to revenue expansion

Performance Status

Despite Q3 results hitting all-time highs, the stock fell because of valuation. Even with good results, the stock had risen beyond what those results justified.

📊 Investment Perspective Analysis

Key Point: "If Nobody Sells, It Won't Fall"

Here's an interesting observation:

"No matter how overvalued a stock is, if people don't sell, the price won't fall."

Particularly when investors with strong conviction in Palantir—like many Korean investors—continue to hold, the stock can withstand short-selling pressure well.

Advice for Current Holders

If you already own Palantir:

Short-term investment: Current situation may be burdensome
Long-term investment (10+ years): Can hold with target price in mind
Early investors (bought under $20): Already up 144%+

From a long-term perspective, holding while targeting $200 is a valid strategy.

🎯 When to Buy?

Appropriate Buy Price Range

Based on chart analysis, around $150 is considered fair value.

There was actually a time when it dropped below $150, and that was a good buying opportunity.

Future Outlook

If there's another surge in December, some project it could reach up to $200.

Scenario	Expected Price
Fair Value (chart-based)	~$150
During surge	~$200
Long-term target	Adjusts with growth

⚠️ Risk Factors

Points to Watch

Extremely High Valuation
- Significant time needed for P/E normalization
Short-Selling Pressure
- Attacks from famous investors like Michael Burry
Growth Dependency
- Sustained high growth essential to justify valuation
Market Sentiment
- Vulnerable if AI bubble concerns grow

📈 Key Takeaways

Item	Details
Current P/E	~300s (was over 600)
Fair Value	~$150 (chart-based)
Target Price	~$200
Investment Style	Long-term recommended (10+ years minimum)
Holder Advice	Hold with target price in view
Potential Buyers	Consider buying around $150

Palantir should be approached as a "forever stock" (10+ year hold). While the P/E is burdensome short-term, if Gotham (government) and Foundry (commercial) businesses continue growing long-term, even the current stock price could eventually be justified.

If a buying opportunity arises below $150, it could be a good entry point. If you already own shares, holding while targeting $200 is a reasonable strategy. However, always be aware of the risks associated with high valuation. 💎