Artificial intelligence (AI) grew to become the most important development on Wall Street a few years in the past, and there was no scarcity of shares driving its tailwinds. While a few of these corporations have been deserving of the passion they’ve obtained, others have benefited extra from meme-driven narratives rooted in AI hype.
Perhaps no different inventory has change into as controversial as Palantir Technologies (PLTR +1.95%) over the past three years. At the daybreak of the AI revolution, it was valued at a modest $12 billion. Today, the corporate’s market cap is closing in on $400 billion — making it one of many largest enterprise software program companies on the earth.
PLTR Market Cap knowledge by YCharts.
Let’s unpack Palantir’s efficiency over the previous few years. From there, I’ll dive into the corporate’s valuation profile to assist assess if the corporate’s premium is justified.
What Palantir does in another way
Palantir is mostly described as a specialist in knowledge analytics. At a excessive stage, that is not a distinctive operate to supply. The software-as-a-service (SaaS) business is riddled with instruments that may plug into workflows and synthesize knowledge into properly formatted dashboards.
Here’s the issue: Such dashboards are sometimes backward-looking, or show data summarized in ways in which make it difficult for leaders to get actionable insights out of it.
This is the place Palantir differentiates itself. Through its Foundry platform, Palantir can construct detailed ontologies for decision-makers. Ontologies are visualizations that illustrate an group’s knowledge inputs at a granular stage. What’s even higher is that these fashions will be tweaked in actual time — permitting purchasers to simulate particular adjustments or conditions and see how they might impression the enterprise and its prospects.
This characteristic is making Palantir a mission-critical piece of infrastructure for corporations throughout a number of industries — amongst them, well being care, retail, manufacturing and logistics, monetary providers, power, and protection operations.
Image supply: Getty Images.
How has AI impacted Palantir’s development?
I like to make use of the general public launch date of ChatGPT to mark the beginning of the AI revolution. OpenAI launched its flagship mannequin on Nov. 30, 2022. In that yr, Palantir’s income grew by 24% to $1.9 billion. Moreover, on the finish of 2022, the corporate boasted 367 prospects throughout its industrial and authorities sectors.
Fast-forward to 2025: Revenue grew by 56% yr over yr to $4.5 billion as the corporate’s buyer rely reached 954.
While 2025 featured a variety of high-profile offers, maybe none was better for the corporate than the contract it inked with the U.S. Army, which will probably be price as much as $10 billion over the next decade. Furthermore, per the corporate’s 10-Okay submitting, Palantir ended 2025 with $11.2 billion in complete remaining performance obligations — an improve of 105% yr over yr.
With development of this magnitude in simply a few quick years, demand for Palantir’s AI providers has clearly been a transformative catalyst for the corporate.
Today’s Change
(1.95%) $2.98
Current Price
$155.75
Key Data Points
Market Cap
$365B
Day’s Range
$150.52 – $156.15
52wk Range
$66.12 – $207.52
Volume
1.3M
Avg Vol
48M
Gross Margin
82.37%
Is Palantir inventory a purchase?
Given these figures, it is pure that development buyers would flock to Palantir inventory. The query for buyers at present, nonetheless, is whether or not the shares have change into overbought.
If you have a look at the corporate’s valuation profile in isolation, you’d undoubtedly suppose the inventory is overpriced. After all, how can a firm fairly justify a price-to-sales (P/S) ratio of 87 and a price-to-earnings (P/E) a number of of 241? Even for a high-growth software program inventory, this appears extreme.
However, there’s an necessary attribute to Palantir that shouldn’t be ignored: The firm’s ontology strategy makes it a class disruptor within the knowledge analytics area. What I imply by that’s whereas rival choices corresponding to Snowflake Databricks or Microsoft Fabric are succesful for storage infrastructure, they fall quick in the case of serving to enterprises construct end-to-end knowledge working methods.
This dynamic creates distinctive arbitrage alternatives for Palantir, which has demonstrated an skill to cross-sell its choices to its purchasers. A buyer might start its relationship with the corporate by signing a deal to make use of Foundry, and then later develop into Gotham or Apollo (relying on the precise use case). Against this backdrop, Palantir has constructed a structural moat that just about no different SaaS supplier has been capable of compete with at scale.
Considering the corporate’s sturdy development over the previous few years, and administration’s steerage for that development to additional speed up to 61% in 2026, I feel Palantir inventory is positioned to proceed delivering market-beating positive factors over the following a number of years.
For this motive, Palantir may very well be seen as a compelling long-term purchase for buyers seeking to construct a sturdy AI-themed portfolio.
