We recently compiled a list of the 10 Best Performing S&P 500 Stocks So Far in 2025. In this article, we are going to take a look at where Palantir Technologies Inc. (NASDAQ:PLTR) stands against the other stocks.
Emily Rowland, co-chief investment strategist at John Hancock Investment Management, joined a discussion on CNBC’s ‘Squawk Box’ on February 13 to share her insights on the markets and the upcoming PPI (Producer Price Index) report. She thinks that the S&P earnings are highly underappreciated right now. She noted that the market’s reaction to inflation data has been asymmetric. While higher inflation numbers are often shrugged off, any relief from softer inflation prints tends to cause bigger moves in the markets. This was evident in the response to the CPI (Consumer Price Index) report. Regarding market performance, Rowland highlighted that the S&P 500 earnings were coming in with strong growth (16% year-over-year for the fourth quarter) and this growth is broad-based across sectors like healthcare and utilities. Financials also showed significant gains with a 50% increase.
On discussing President Trump’s announcement of retaliatory tariffs via Truth Social, Rowland said that her team avoids making tactical investment decisions based on political outcomes due to their unpredictability and rapid changes. In terms of attractive sectors for investment within US markets, she highlighted healthcare and industrial companies as promising areas due to their strong fundamentals and potential benefits from ongoing supply chain reshoring activities within the US. While acknowledging political factors can influence sector performance, her strategy focuses on longer-term economic trends rather than short-term political developments when considering investments in key indices like those represented by major US equities such as those found in the S&P 500 index.
Methodology
We first sifted through the Finviz stock screener to compile a list of the best-performing S&P 500 stocks. We then picked the top 10 stocks with the highest year-to-date performance, as of February 17. The stocks are ranked in ascending order of their year-to-date performance. We’ve also added the hedge fund sentiment for each stock which was sourced from Insider Monkey’s database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 43
Year-to-Date Performance as of February 17: 57.56%
Palantir Technologies Inc. (NASDAQ:PLTR) develops and deploys software platforms for intelligence agencies and other organizations. It offers Palantir Gotham for counterterrorism analysis, Palantir Foundry for data integration and analysis, Palantir Apollo for software deployment, and Palantir AIP for using large language models.
On February 4, Morgan Stanley raised the company’s target price to $95 from $60 and upgraded it to Equal-weight from Underweight. Citing six straight quarters of accelerating growth driven by US commercial and government contracts, they noted the company’s projected Q1 2025 revenue growth above 30% (vs. mid-20% consensus). Despite the high valuation, the upgrade reflects improving fundamentals and a strong 2025 outlook.
The company’s data platform segment, particularly its AI Platform (AIP) drives its revenue growth. AIP helps clients integrate AI into their operations, creating AI agents that automate tasks. This product has attracted new customers and propelled the company’s stock to new heights. In Q4, its revenue grew 36% year-over-year to $828 million. Palantir Technologies Inc. (NASDAQ:PLTR) projects Q1 2025 revenue of around $860 million (36% growth rate) and $3.75 billion for the full year 2025 (31% growth). Analysts, while praising its execution and market position, also caution about the stock’s high valuation and the potential for a correction. The company’s stock is up nearly 585% since early 2024.
Alger Mid Cap Focus Fund is positive on Palantir Technologies Inc. (NASDAQ:PLTR) due to strong results, the success of its AI platform, and potential government partnerships. Here’s what the fund stated the following regarding the company in its Q4 2024 investor letter:
“Palantir Technologies Inc. (NASDAQ:PLTR) builds advanced platforms for data integration, management, and security, enabling interactive, AI-assisted analysis for its users. Its core offerings include Palantir Gotham, designed for government clients, and Palantir Foundry, tailored for commercial customers. Originally focused on U.S. intelligence agencies, Palantir has expanded into defense contracts with western governments and entered the commercial market in 2016. During the quarter, shares contributed to performance after the company reported better-than-expected fiscal third quarter operating results, along with management raising its full year 2024 revenue guidance. Management noted that the recent launch of its AI platform (AIP), which leverages generative AI to optimize business operations, has driven significant growth and investor interest. Additionally, we believe Palantir could be a key partner for the U.S. government’s new Department of Government Efficiency (DOGE), as its AI-driven platforms are ideally suited to help identify inefficiencies, allocate resources effectively, and achieve cost reductions.”
Overall PLTR ranks 1st on our list of the best performing S&P 500 stocks so far in 2025. While we acknowledge the potential of PLTR as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PLTR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.