Analysts predict Arm Holdings could surpass Palantir's market cap in three years

Palantir Technologies has seen significant stock gains, rising over 1,100% recently. However, its high valuation, with a price-to-sales ratio of 75, raises concerns about sustainability. Analysts predict a potential 50% drop in its stock price over the next year. In contrast, Arm Holdings has doubled in value since its market debut in September 2023, now valued at around $135 billion. Analysts expect Arm's stock to rise further, with a price target of $160, indicating a 24% increase. Arm's lower valuation and faster expected earnings growth make it a more attractive investment compared to Palantir. With a strong business model and increasing demand for its technology, Arm may surpass Palantir's market cap within three years.