Palantir trades at 292 times forward earnings.
Let me repeat that: Two hundred and ninety-two times earnings.
That’s not a valuation. That’s a hallucination.
For perspective, during the peak insanity of the dot-com bubble in March 2000, Cisco – the absolute poster child of irrational exuberance – traded at “only” 196 times earnings.
Today, I’m going to show you why Palantir’s $450 billion market cap is built on quicksand, why the smartest money on Wall Street is already heading for the exits, and most importantly – the one beaten-down value stock that’s about to eat Palantir’s lunch.
The $100 Billion Revenue Multiple That Nobody Can Justify
Here’s what the AI cheerleaders won’t tell you about Palantir…
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The company is on track to generate $3.1 billion in revenue this year. Its market cap? $450 billion.
That’s a price-to-sales ratio of 145.
To put that in perspective, even Microsoft at the peak of its monopoly power never traded above 20 times sales. Apple, during the iPhone’s greatest growth phase, peaked at 8 times sales.
But somehow, we’re supposed to believe Palantir deserves to trade at 145 times sales because… artificial intelligence?
Here’s the brutal math: For Palantir to justify its current valuation using traditional metrics, it would need to grow revenue by 50% annually for the next decade AND expand profit margins to Apple-like levels.
The probability of that happening? Essentially zero.
The Circular Money Laundering Scheme Wall Street Doesn’t Want You to See
Want to know the dirty secret behind the AI boom?
It’s circular financing on steroids.
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Microsoft invests billions in OpenAI. OpenAI uses that money to buy compute from… Microsoft Azure. Microsoft books it as AI revenue growth. Wall Street cheers. Stock goes up.
Amazon funds Anthropic. Anthropic spends on AWS. Amazon claims explosive cloud growth. Stock goes up.
Google backs every AI startup with a pulse. They all use Google Cloud. Google reports “accelerating AI adoption.” Stock goes up.
It’s the same scam we saw during the dot-com bubble when Cisco would “invest” in startups, then those startups would turn around and buy Cisco equipment with Cisco’s own money. That ended with an 89% crash.
Palantir is swimming in the same polluted pool. Its growth is being turbocharged by government contracts that are themselves justified by AI hype. When the music stops – and it always does – the companies with real earnings will be the only ones left standing.
Warren Buffett’s Secret $350 Billion Bet
While retail investors chase AI fantasies, Warren Buffett just made one of the most contrarian bets of his career.
In August, Berkshire Hathaway quietly accumulated a massive position in UnitedHealth Group.
Not sexy. Not exciting. Not AI.
Just a boring insurance company that generates $23 billion in actual profit.
Here’s what Buffett sees that the momentum chasers don’t:
UnitedHealth by the Numbers:
- Revenue: $389 billion (125x Palantir’s revenue)
- Net Income: $23 billion (12x Palantir’s ENTIRE revenue)
- Free Cash Flow: $27 billion annually
- P/E Ratio: 21 (vs Palantir’s 292)
- Market Cap: $560 billion (but about to explode higher)
This isn’t speculation. These are real numbers from a real business that actually makes real money.
The Three Catalysts That Will Send UnitedHealth Soaring
Right now, UnitedHealth is facing what Wall Street calls “transitory headwinds.”
Translation: Temporary problems that have created a massive buying opportunity.
Catalyst #1: The Medicare Advantage Reset
UnitedHealth is repricing its entire Medicare Advantage portfolio. After absorbing higher medical costs in 2024, they’re implementing price increases of 8-12% across the board for 2025.
That’s $15 billion in additional revenue dropping straight to the bottom line.
Catalyst #2: The Optum Margin Expansion
Their Optum health services division – which everyone forgets is larger than most Fortune 500 companies on its own – has been absorbing integration costs from recent acquisitions.
Management just confirmed margins will expand by 300 basis points starting in 2027. On $226 billion in Optum revenue, that’s $6.8 billion in pure profit improvement.
Catalyst #3: The Regulatory Clarity Play
The market has priced in worst-case scenarios for every regulatory investigation. The Medicare billing probe? Already reflected in the stock price. Antitrust concerns? Baked in.
But here’s what history shows: When regulatory uncertainty clears – even with moderate penalties – healthcare stocks typically rally 25-40% within six months.
The Math That Makes This Trade Inevitable
Let’s do the arithmetic that apparently nobody on Wall Street can perform anymore:
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Palantir’s Reality Check:
- Current Market Cap: $450 billion
- 2025 Projected Earnings: $1.9 billion
- P/E Ratio: 237
- Required to justify valuation: 40% annual growth for a decade
UnitedHealth’s Hidden Value:
- Current Market Cap: $560 billion
- 2025 Projected Earnings: $28 billion
- P/E Ratio: 20
- Historical average P/E: 24
If UnitedHealth simply returns to its historical average valuation of 24 times earnings, the stock reaches $672 billion in market cap. That’s a 20% gain from here.
But here’s where it gets interesting…
If Palantir’s multiple compresses to even a still-insane 100 times earnings (from 292 today), its market cap falls to $190 billion. That’s a 58% crash.
By the end of 2026, UnitedHealth will be worth more than Palantir. Bank on it.
The 1999 Playbook Repeating in Real Time
In March 2000, nobody could imagine tech stocks crashing. Cisco was the future. Intel was unstoppable. Sun Microsystems was going to power the entire internet.
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Within 24 months:
- Cisco fell 89%
- Intel dropped 78%
- Sun Microsystems lost 95%
Meanwhile, boring value stocks like Berkshire Hathaway and Johnson & Johnson doubled.
The same pattern is setting up today. The difference? This time it’s AI stocks, not internet stocks. But the math is identical: impossible valuations supported by circular reasoning and cheap money.
When reality returns – and it always does – money will flood out of story stocks and into profitable businesses with actual earnings.
Your 60-Day Window of Opportunity
Wall Street analysts are already jumping ship on Palantir.
The median price target has been cut to $165 per share – that’s 30% below current levels. Morgan Stanley just downgraded it to “underweight.” Goldman Sachs refuses to even cover it.
Meanwhile, institutional money is quietly accumulating UnitedHealth. Besides Buffett, we’re seeing massive purchases from:
- Vanguard (added 4.2 million shares last quarter)
- BlackRock (increased position by 18%)
- State Street (new $8 billion position)
The smart money knows what’s coming. The question is: Will you position yourself before the rotation happens?
The Trade of the Decade
Here’s exactly what’s going to happen:
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Step 1: The AI bubble will show its first cracks when companies start missing their astronomical growth projections. (This has already started – look at Intel and Super Micro Computer.)
Step 2: Momentum traders will rush for the exits, crushing valuations for anything AI-related. Palantir, trading at 292x earnings, has the furthest to fall.
Step 3: That capital will rotate into profitable companies trading at reasonable valuations. UnitedHealth, at 20x earnings with 15% growth, becomes the obvious destination.
Step 4: By December 2026, UnitedHealth’s market cap exceeds $700 billion while Palantir struggles to hold $200 billion.
This isn’t speculation. This is pattern recognition based on 100 years of market history.
Every bubble follows the same script. Every rotation happens the same way. The only variable is timing.
And based on the data, that timing is now.
Tom Anderson
Editor, Wall Street Watchdogs
P.S. There’s one more number you need to know: $27 billion. That’s how much free cash flow UnitedHealth generates every single year. Palantir’s ENTIRE annual revenue is $3.1 billion. When reality returns to the market, which company do you want to own? The one with the story, or the one with the cash? Choose wisely – your retirement depends on it.
Wall Street Watchdogs is committed to uncovering the truth about financial markets and helping individual investors prepare for systemic risks that mainstream media won’t discuss. We receive no compensation from the companies or assets we analyze. This article is for educational purposes only and should not be construed as investment advice.
