Palantir Insiders Are Selling 9 Shares for Every 1 They Buy. Here Is the Defense Stock Smart Money Is Buying Instead

Palantir (NASDAQ:PLTR | PLTR Price Prediction) is the stock everyone wants to talk about after a 70% revenue surge in Q4 2025 and CEO Alex Karp’s now-famous “We are an n of 1” declaration.

But here’s what’s worth watching underneath the headlines.

Palantir Is Priced For A Future That Cannot Disappoint

The numbers underneath the hype look ugly for anyone buying today. Palantir trades at a trailing P/E of 153, a forward P/E of 97, and a price-to-sales ratio of 63. The stock has already given back 22.99% year to date, sliding from $177.75 to $136.89 even after blowout earnings. The market is starting to choke on the multiple.

Insiders are voting with their wallets. The selling-to-buying ratio over the last three months sits at 9.3 to 1, with director Peter Thiel offloading more than 2 million shares on a single day in March at prices between $140.97 and $146.80. Karp and director Stephen Cohen joined the parade in February. Add $684 million in fiscal 2025 stock-based compensation and the dilution math gets uglier every quarter.

To justify today’s price, Palantir has to deliver on its 61% revenue growth guide for 2026 with U.S. commercial growth above 115%. Any wobble, and the multiple compresses violently. Reddit sentiment has already cooled from a peak of 65.65 on April 22 to 52.16. The crowded trade is unwinding in slow motion.

Why AeroVironment Deserves A Closer Look

AeroVironment (NASDAQ:AVAV) is the asymmetric setup retirement investors should be studying while the crowd argues over Palantir. The maker of Switchblade loitering munitions and autonomous systems carries an $8.42 billion market cap, a forward P/E of 45, and a price-to-sales ratio of just 5. Three reasons it deserves your attention:

Faster growth at a fraction of the multiple. AeroVironment posted 143.4% revenue growth in its most recent quarter, well ahead of Palantir’s 70%. The stock has been pushed down to $166.45, off 31.19% year to date, on a goodwill impairment tied to a stop-work order. The fundamentals stayed intact while the price reset.

Visibility Palantir cannot match. AeroVironment closed its most recent quarter with a record $1.10 billion funded backlog and a 1.6x book-to-bill ratio. Year-to-date bookings hit $2.1 billion, with total awards of $4.5 billion across the first nine months, including an $874 million FMS IDIQ contract and a $500 million HELMSSMAN award.

It owns the actual growth vertical. Drones, loitering munitions, and autonomous warfare are where defense procurement dollars are flowing. The Autonomous Systems segment generated $278.74 million in the last quarter alone, fueled by Switchblade demand on awards such as the $186 million U.S. Army task order.

The Primes Are The Backup Plan

Retirement investors who want pure stability can lean on Northrop Grumman (NYSE:NOC) with its $95.61 billion backlog and B-21 production ramp, RTX (NYSE:RTX) with four straight EPS beats and a $271 billion backlog, or Lockheed Martin (NYSE:LMT) at a forward P/E of 17 with a 2.67% dividend yield. All three carry single-digit growth profiles, but every one of them trades at a small fraction of Palantir’s multiple while serving the same defense modernization wave.

The smarter AI-defense capital appears to be rotating into AeroVironment while the headlines stay fixated on the crowded Palantir trade.