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Kyle Dijamco is a proud member of Palantir Technologies' rapidly growing retail investor base.
The Los Angeles-based marketer has bet heavily on the defense technology stock, even increasing its exposure after a decline earlier this year. The 31-year-old's position is currently around $25,000.
“It's an exciting stock,” Dijamco told CNBC.
Dijamco is part of an army of small traders who poured billions of dollars into the Denver-based company's stock in 2025, according to data from VandaTrack. Its huge gains in recent years amid the artificial intelligence boom have made the stock an undeniable star of the retail investing world, despite Wall Street's reservations about its valuation.
Retail investors were on track to buy a total of nearly $8 billion in Palantir shares in 2025, according to Vanda data as of Dec. 8. This is an increase of more than 80% compared to last year and reflects an increase of over 400% compared to 2023.
Palantir is on track to become the fifth most-purchased security of the year, according to Vanda data. The stock trails only megacap names like Tesla And Nvidia and popular exchange-traded funds like the SPDR S&P 500 ETF Trust (SPY)which represents the entire US market benchmark.
“It was great,” said Viraj Patel, deputy head of research at Vanda, which tracks retailer flows. “Palantir has sort of been included in this group of AI tech posters [children].”
A “crazy” business
Palantir has captured the hearts of private investors with its rise as a stock. Its shares have risen more than 150% so far in 2025, putting the name on track for its third straight year of triple-digit gains.
The stock has soared nearly 3,000% in the last three years, surpassing its record high S&P 500That's about 80% profit and tech-heavy Nasdaq CompositeOver the same period, it has increased by more than 120%.
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Palantir vs. S&P 500 and Nasdaq Composite, 1-year chart
Since its market debut in 2020, Palantir has been considered a mysterious company given its dealings with public and private entities.
On the surface, Palantir helps both governments and large companies organize their data. The company is seen not only as a beneficiary of efforts to adopt AI, but also as a winner of the Trump administration's priorities of increasing federal government efficiency and strengthening national defense.
“The joke for a while was, 'What does Palantir even do?'” said Paxton Earl, an investment banker specializing in software who began reading regulatory reports to better understand the company. After learning more, he thought, “This is actually a crazy business. It's really good.”
Through research, Earl discovered that the company's income beyond military work was more diverse than he had originally predicted. Additionally, the 23-year-old noted that Palantir worked with consumer brands he knows, such as Ferrari and Wendy's.
The logo of US software company Palantir Technologies is seen in Davos, Switzerland, on January 22, 2020.
Arnd Wiegmann | Reuters
The San Diego resident said he purchased additional shares following the company's third-quarter earnings report in early November. Palantir slumped 16% this month as investors abandoned its AI operations on valuation fears, and the stock posted its worst monthly performance in more than two years.
Wall Street attributed the selloff largely to profit-taking and general concerns about the health of AI trading. Vanda noted that the majority of Palantir's retail purchases occurred in the first nine months of the year, but then cooled off as growing fears of an AI bubble led investors to question the trade.
A retail romance
Palantir has gone out of its way to woo individual traders like Earl.
While other big-name companies typically reserve the question-and-answer portions of earnings calls for Wall Street analysts or journalists, Palantir also accepts inquiries from retail investors. In an annual video shared from a ski slope late last year, CEO Alex Karp specifically appealed to these small shareholders.
“I am extremely grateful to all the individual investors who seized the time and opportunity and had the courage to look beyond conventional, rusty, crusty platitudes,” Karp said while wearing reflective goggles and holding ski poles.
The stock has become a hot topic on the popular WallStreetBets Reddit Forum. On several days in 2025, it was the most-mentioned stock on the discussion board, according to meme stock tracking firm Breakout Point.
Palantir “is a long-standing WallStreetBets romance,” said Ivan Ćosović, managing director of Breakout Point. “They love it.”
The hesitation of big money
Wall Street hasn't jumped on board with the same passion as the average Joe. The average analyst surveyed by LSEG has a “hold” rating, with several expressing concerns about the stock's price appreciation.
According to Gil Luria, head of technology research at DA Davidson, the company's valuation has made its stock a “non-starter” for institutional clients. Palantir has a multiple of about 450 times trailing earnings, hovering around the S&P 500 average of nearly 28.
On the other hand, Luria said retail investors are likely impressed by Palantir's “ambitious” mission to play a role in U.S. defense. These everyday investors would also likely be attracted to Karp, who Luria is similar to Tesla CEO Elon Musk in his ability to sell a business vision. However, Luria said Karp did not generate as much controversy.
Palantir Technologies Inc. CEO Alex Karp speaks during the AIPCon conference in Palo Alto, California, USA, March 13, 2025.
David Paul Morris | Bloomberg | Getty Images
Luria said Palantir also draws parallels with Tesla stock a decade ago, when the automaker presented a future focused on electric vehicles. Tesla shares have risen about 3,000% over the past decade, while the S&P 500 has gained more than 230% over the same period.
The question, Luria said, is whether the retailers who backed Tesla a decade ago are right again with Palantir.
The analyst said Palantir's earnings results have been largely positive in recent years. Palantir's second-quarter report in August – in which the company beat the public's estimates and raised its full-year forecast due to the AI boom – left him wondering whether the stock was worth getting into despite its lofty valuation level.
“Even we jaded, old, stodgy Wall Street analysts were surprised by the magnitude of the success,” Luria said. “It was such an overwhelming success that I had to rethink everything I knew.”
Scion Asset Management – the now-defunct fund of “The Big Short” investor Michael Burry – announced bets against Palantir and its AI darling Nvidia in the third quarter. Karp told CNBC that Burry's move was “crazy.”
Overvaluation or fate?
Private investors are not deterred by the reluctance of their institutional investors. As Breakout Point's Ćosović put it: Where Burry sees “overvaluation,” WallStreetBets sees “fate.”
Palantir has seen its fair share of volatility this year, falling more than 10% on several single trading days. But for stakeholders like Dijamco, the California-based marketer, these fluctuations offer cheaper entry points to buy into a name they believe in.
“You kind of become desensitized to the price fluctuations,” said Dijamco, who plans to buy thousands of dollars worth of additional shares in the next big downturn. “I’m just confident it’s going to go well.”