On Monday Nov. 4, data analytics and artificial intelligence (AI) darling Palantir Technology (NYSE: PLTR) will release earnings for the company's third quarter ended Sept. 30.

Let's dig into how Palantir stock has moved throughout 2024 and explore if investors should scoop up shares prior to the third-quarter report.

When in doubt, zoom out

As of intraday trading on Oct. 22, shares of Palantir have risen by 149% so far this year. At a share price of $42.79, Palantir stock is sitting around all-time highs.

To add some more color here, Palantir stock has rocketed by 78% since the company published second-quarter results on Aug. 5.

It's pretty clear that investors have been cheering Palantir on the backdrop of a euphoric AI narrative. However, what does all of this price appreciation really mean?

Below, I'll break down some valuation trends to help paint a more detailed picture of where the company stands.

An honest assessment of Palantir's valuation

As a growth stock, valuing Palantir can be a little challenging. While the company is generating positive net income and free cash flow, both metrics are still somewhat small, so valuing Palantir on these measures isn't entirely helpful.

As the chart above indicates, Palantir currently trades at a price-to-sales (P/S) multiple over 40. Furthermore, the company's P/S has expanded considerably over the last three months alone -- suggesting the stock has been witnessing some outsize momentum.

As I've expressed before, Palantir is a core position in my own portfolio and I am bullish on the company's long-term potential. However, the tailwinds fueling its current valuation are hard to overlook and I think the stock has gotten a tad pricey.

Keep the long-term story in mind

The chart below shows trends in Palantir stock since going public in late 2020. The purple circles with the letter "E" in the middle indicate earnings reports.

Since the beginning of last year, shares of Palantir have generally risen following an earnings report. I think this is an important idea to keep in your back pocket, because it helps underscore the idea that Palantir stock has been a consistent winner over longer time periods -- suggesting investors have had ample opportunities to buy the stock regardless of the specific time or event.

As an investor, I'll be keeping an eye on whether or not large institutional investors continue buying shares. To me, such activity is a good indicator of how influential investors may perceive Palantir's valuation as the company continues to scale.