Palantir stock has been on a tear in 2025, rising more than 40% even after Tuesday's big drop. Analysts have expressed concerns about the AI firm's valuation.

Palantir Technologies ( PLTR -11.92%) stock had plunged 14% as of 10 a.m. ET on Tuesday, May 6, as investors reacted to its first-quarter financial results. The company reported solid results amid continued demand for its artificial intelligence (AI) platform, but the market clearly had higher expectations.

However, the stock tumbled 12% the next trading day, nearing its biggest decline since May 7, 2024, when it fell over 15%. 💰 Stay ahead of the markets: Subscribe to TheStreet's free daily newsletter💸 For the first quarter of 2025,