The bottom line is that the attractiveness of stock prices, like beauty, is in the eye of the beholders. As long as enough investors think that Palantir's share price could continue rising, it will. For a bubble to burst, more investors must think there is a bubble than not. That might not happen with Palantir for a while.

Palantir Technologies (PLTR) is the top-performing stock in the S&P 500 to start 2025, soaring 50% so far this year. But the software company’s bright earnings prospects won’t be enough to protect investors from short-term pain as its share price eventually returns to more normal levels,

Palantir Technologies' stock price surged from $6 to over $100 due to AI-driven growth, especially in the US market. Analysts are divided on its valuation, with some claiming it's overvalued despite its potential.

While Nvidia stock is still pricey in many respects, it may have ceded the title of "Wall Street's biggest bubble stock" to AI-driven data-mining specialist Palantir Technologies ( PLTR -2.38%), based on what history tells us.