Palantir Stock Is Flying Higher Today -- Should You Buy This Red-Hot AI Stock Before May 5?

Shares of Palantir (NASDAQ: PLTR) are rising on Friday. The company's stock gained 5.8% as of 12:14 p.m. ET but gained as much as 6.9% earlier in the day. The leg up came as the S&P 500 gained 1.3% and the Nasdaq Composite lost 1.6% on the day.

Shares of the artificial intelligence or AI-powered analytics company received a boost today after the latest jobs numbers were released. The report painted a better-than-expected picture, easing fears of a recession.

The job market appears steady

The Bureau of Labor Statistics reported stronger-than-expected job growth for April. Nonfarm payrolls increased by 177,000 jobs, far surpassing economists' expectations of 133,000, while the unemployment rate held steady at 4.2%. Another metric that includes people who consider themselves underemployed and those working part-time jobs, dropped -- another positive sign.

Many had feared the report would show signs that Trump's tariffs were leading to a weakening job market, but at least for now, the market looks mostly healthy.

Image source: Getty Images.

Palantir's valuation makes it vulnerable

Since the company deals in software, it is more shielded from the impacts of Trump's tariffs than many in the AI space, at least directly. But many of its clients aren't so lucky and could start tightening their belts if their bottom lines are meaningfully hurt, leading to lost contracts for Palantir. While today's report is encouraging, we're not out of the woods yet.

Palantir stock carries a hefty premium, trading at nearly 650 times earnings. That is really an incredible multiple. When investors are willing to pay such a premium, they expect the company to deliver perfection, more or less. That makes Palantir's stock especially vulnerable to changes in the macro environment. While the company's earnings call on May 5 will tell us more about how much it expects to be affected by the tariffs or their downstream effects, I can't recommend Palanitr at its current valuation.

Should you invest $1,000 in Palantir Technologies right now?

Before you buy stock in Palantir Technologies, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palantir Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $611,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $684,068!*

Now, it’s worth noting Stock Advisor’s total average return is 889% — a market-crushing outperformance compared to 162% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 28, 2025

Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.