Palantir Investors Unfazed by Sky-High Valuation as Stock Surges

Palantir Technologies Inc.’s breakneck rally shows no sign of letting up as investors remain captivated by its artificial intelligence promise despite one of the most expensive valuations among US stocks.

Shares of the data-analysis software company closed at a record for a third consecutive day Tuesday, pushing their gain for the year to 76%. While that’s good enough for second-best on the S&P 500 Index, it has Palantir trading at a staggering 205 times projected earnings over the next 12 months, a hefty premium to the broader market’s multiple of 22 times.

“You’re starting to see almost like a ...