Have Palantir and IBM AI stocks hit their peak for 2025?

It’s been a blockbuster year for AI stocks, and few have shone brighter than Palantir and IBM. One has been dubbed a “runaway freight train,” and the other is leading the Dow thanks to quantum computing ambitions that sound like something out of sci-fi. 

Both have surged to record highs, riding the AI wave with style - but here’s the real question: Is this just the warm-up, or have they already hit their stride for the year?

With analyst views all over the shop and market sentiment flickering between FOMO and caution, it’s time to take a closer look. 

Are Palantir and IBM still climbing - or are they now flirting with the ceiling?

Palantir stock outlook: The freight train that won’t slow down?

Let’s start with Palantir. Its stock has rocketed nearly 90% higher in 2025, fuelled by a heady mix of government contracts, AI narrative momentum, and big, bold projections.

Loop Capital recently called it a “runaway freight train never coming back,” raising their price target to a staggering $155, well above the Wall Street average of $95. Bold stuff. The firm was clear, though: “PLTR is not for the faint of heart.” 

Palantir’s software, particularly Foundry, has embedded itself in several key U.S. government agencies, including Homeland Security and Health and Human Services. These aren’t flashy consumer apps; they’re high-stakes, behind-the-scenes tools with long-term value. And they’re giving investors reasons to believe.

But here’s the issue: Palantir’s revenue is still relatively small - just $3.1 billion over the past 12 months. Even with a strong 39% year-on-year growth rate, it would take over a decade to reach $100 billion in revenue, and that’s assuming everything keeps going smoothly. That’s a long track for this freight train to ride.

Oh, and let’s not forget the TAM (total addressable market) debate. Optimists say it could hit $1.4 trillion by 2033. Realists? They point out that even Palantir’s own conservative estimate was $120 billion - still far from today’s actual numbers.

So, is Palantir still climbing? Possibly. But at these prices, analysts say a lot of future success could already be baked in.

IBM stock outlook: Big blue’s reboot

Then there’s IBM. The elder statesman of tech has found a fresh lease of life, charging above $284 and dragging the Dow Jones up with it. Not bad for a company that’s spent the last decade dodging the “has-been” label.

The buzz is mostly centred on two big things: AI and quantum computing. IBM isn’t trying to be trendy - it’s targeting the heavy-duty stuff. Its partnership with Finanz Informatik, serving Germany’s Sparkassen-Finanzgruppe, shows that its hybrid cloud and AI stack have real-world, enterprise-scale appeal.

Then there’s the quantum moonshot. IBM recently announced it’s building the world’s first large-scale, fault-tolerant quantum computer, with the Starling system set to land in Poughkeepsie, New York, by 2029 and scale up by 2033. 

It aims to handle 20,000 times more operations than today’s quantum machines. That’s not just incremental progress - it’s a full-blown tech revolution- if it works. The market liked it, and investors piled in. With annual revenue at $62.8 billion, IBM looks a lot more grounded than some of its smaller, flashier peers.

But analysts remain divided. Stifel’s all-in with a Buy rating and a $290 price target. UBS? Not impressed, slapping on a Sell and calling for a retrace to $170. Morgan Stanley sits in the middle, with an Equal-weight and a $233 target.

IBM’s story is solid, but it’s also slow-moving. Quantum won’t drive earnings tomorrow, and the stock’s recent rise may have priced in more excitement than execution.

What’s driving this AI stock rally, and is it sustainable?

Zooming out, the Palantir-IBM surge fits neatly into a bigger 2025 trend: AI euphoria. Investors are throwing serious capital at anything remotely AI-adjacent, especially if it smells like infrastructure.

But there’s a growing sense that we may be nearing the top of this particular leg of the rally. Macro headwinds, political instability, and a possible Fed pivot could change the mood quickly. Add in the unpredictable nature of AI regulation and quantum timelines, and you’ve got a recipe for volatility.

Still, it’s worth noting that both Palantir and IBM are not just riding the wave - they’re building the wave. PLTR’s edge in secure government data work and IBM’s enterprise AI and quantum roadmap are not fly-by-night fads. They’re long games, and investors may need the patience to match.

AI stock outlook: Ceiling or launchpad?

So, have they peaked?

Maybe - at least for now. These rallies are impressive, but they’ve also raised a lot of expectations. If you’re buying at these levels, you’re betting on execution, delivery, and vision playing out just right.

Then again, if AI really is the next industrial revolution, Palantir and IBM may just be getting started.

At the time of writing, PLTR is seeing some retracement after a significant move within a buy zone, hinting at further movement north. However, volume bars show an even tug-of-war between bulls and bears, hinting that we could see a consolidation in the immediate term before a decisive move in either direction.

Should bulls win the tug-of-war, prices could be held at around $145.00. Conversely, if sellers prevail, prices could find support at the $120.00 and $89.00 (in case of a major collapse). 

IBM is still showing bullish candles at the time of writing as prices hover around the all-time high. The bullish narrative is supported by the volume bars showing a clear upward bias. Should prices inch up, they could be held at the $284.50 all-time high. Conversely, should we see a crash, prices could find support at the $256.00 and $243.00 support levels.

Have Palantir and IBM stocks hit their ceiling for 2025?  You can speculate on the price trajectory of these two stocks with a Deriv MT5 account.

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