Palantir Beats, Shares fall, Prospects Incredible

Palantir’s results were incredible. Look below at what is happening to the US commercial business. It is growing as fast as any company could cope with, suggesting overwhelming demand.

The US is the key to what is happening at Palantir.

Customer count is soaring.

This delivers a phenomenal performance on the rule of 40, which says that revenue growth + operating margin at a successful software company should exceed 40. The latest figure for Palantir is 83.

Despite the seminal NATO deal for Palantir’s Maven software, Karp says that Europe is running at least two years behind the US in adopting AI. The rest of the world, excluding the USA, Europe and America’s enemies, is showing signs of waking up to AI and Palantir.

The big picture could hardly be more exciting.

We’re at the dawn of this AI revolution. And in this winner-take-all AI economy, Palantir leads the way.

Ryan Taylor, chief revenue officer, Palantir, Q1 2025, 5 May 2025

Turning to Warp Speed, Palantir’s modern American manufacturing operating system, it continues to move at warp 10. Our nation is in the beginning of a great reindustrialization as we compete with China to secure a free world and individual liberties. This is a competition we cannot afford to lose. We announced our first cohort of Warp Speed customers, including Anduril and L3Harris.

The response has been exceptional, and the pipeline is swelling. Warp Speed integrates engineering tests, production quality, and operations so that manufacturers can build better and build faster. Our FedStart offering hit a major milestone with the approval of our FedRAMP high environment for FedStart customers. This is radical acceleration, both in reduction of time and costs of market access for software companies in the federal space.

Shyam Sankar, chief technology officer, Palantir, Q1 2025, 5 May 2025

It is incredible what is happening.

Chat was always a dead end. Instead, we viewed LLMs as a new runtime for the AI labor. To capture the productive value of this AI labor, you need an intermediate representation of your enterprise that AI can actually interact with. How do you allocate inventory, onboard customers, process claims, call for prior authorization, and the like? That intermediary representation that makes all of that possible is ontology, and that’s why it’s been the secret to our meteoric rise.

We are convinced the normative value for AI is enterprise autonomy, the self-driving company. Users go from performing the workflow to supervising an army of agents, teaching them how to handle edge cases and reducing dwell time. This is where we are maniacally focused with our customers. We have been working with a large multinational bank to automate core back office processes.

What used to take five days now takes three minutes. Much more than the labor savings, this improvement eliminates historical constraints on the middle office and now enables the bank to create entirely new and differentiated financial products. We’re working with the top engineering and construction firm to automate the identification of risks across tens of thousands of pages of technical documents, replacing months of arduous manual reviews with AI labor that can flag major risks to engineers in minutes. And we’re working with a large power systems company to automate the understanding of technical diagrams to turn them into quotes and to orders.

And finally, we’re working with an automotive supplier to analyze CAD files for component designs to have AI labor, validate engineering standards and manufacturability checks. That is a 100-hour process for human engineers, now automated and serving up exceptions for human review. The before and after with AI is stark, and the speed of implementation is accelerating. You can divide companies up into two categories: the quick and the dead.

Shyam Sankar, chief technology officer, Palantir, Q1 2025, 5 May 2025

I have never known such an exciting company.

And with that, we should open up our earnings call. This is obviously a very, very special time to be at Palantir. Palantirians are very excited. And I am — yeah, it’s by far the best time to be at Palantir.

One of the things that’s crazy important about our time at Palantir now is it’s actually the vibe internally, the vibe with our clients, the vibe with inside of our products is. We are at the beginning of our trajectory. We are at the way beginning of a revolution. And we plan to be a cornerstone, if not the cornerstone company, in driving this revolution in the U.S.

Alex Karp, CEO and co-founder, Palantir, Q1 2025, 5 May 2025

Nor has he known such an exciting company; that is very clear.

Many things make Palantir special, but Karp references one of them below.

And last, not least, what we’re really investing in my view is — we’re — we have a truly unique culture. I visit with companies every week.

I’ve been doing it for 20 years. I’ve never seen a company or a culture anything like ours. And that’s what we have to fight to keep. And every single Palantirian is special.

Everyone here is doing something unique. We need to continue to attract and retain people who are different, think differently, and get them focused on the world’s most important missions, building products the way we know how to build them. And that’s our primary investment. It’s not actually a question of money, which, you know, means that that’s how we crush the margins.

It’s about talent and building really great things, the things you ought to build, not the things you’re supposed to build, and getting them to the front line.

Alex Karp, CEO and co-founder, Palantir, Q1 2025, 5 May 2025

Share Recommendations

Palantir. PLTR

Palantir is an amazing, amazing business and like no business we have ever seen before. It is just beginning to build what I expect to become a massive global footprint. The analysts and investing institutions are struggling to deal with what is happening. They look at their spreadsheets, compare the growth with the valuation and see a company that is massively overvalued by any historical standards.

It is retail investors who are driving the valuation because their focus is the story, not the spreadsheets, and they love the story. This makes the shares volatile, and we need to use that volatility to our advantage; that means buy and keep buying, on every buy signal, every month, every day, whatever works for you.

I am sure Palantir will be valued in the trillions of dollars one day and still be an incredibly exciting, fast-growing business.