Palantir Is The Ring To Rule Them All

Below is an analysis which gets to the heart of what makes Palantir so exciting.

Here’s a look at the company’s business and its latest earnings figures. Palantir sells software platforms that aggregate a customer’s data and help that customer make smart use of it — from developing strategies and plans on a battlefield to organizing workflow and patient placement at a hospital. The use of the software is far-reaching.

To further strengthen its offerings, Palantir launched its Artificial Intelligence Platform (AIP) two years ago, which uses artificial intelligence (AI) to drive data gathering and the development of often game-changing plans customers can apply to their own unique problems. This new platform has helped growth surge in recent quarters, and this continued in the first quarter of this year.

Palantir reported a 71% increase in U.S. commercial revenue and a 45% gain in U.S. government revenue in the period, showing that both businesses are booming. The company recorded a record level of U.S. commercial total contract value of $810 million — up 183% year over year.

Customer count advanced in the double digits, and U.S. commercial customers reached 432. It’s important to remember that U.S. commercial customers totaled only 14 about five years ago.

Balancing growth and profit

Finally, the company also demonstrated its strength in balancing growth and profit by reporting a Rule of 40 score of 83%. A software company should have a score of at least 40% to show its success in this area. By doubling that, Palantir is hitting it out of the park.

Now I’ll consider the phenomenal news Karp delivered during this report. “Palantir is on fire,” Karp said during the company’s earnings call. And he wrote in his letter to shareholders that, “We believe our results are indicative of a revolution sweeping across our business and industry.”

Karp says customers are rushing to get on board, to apply AI-led data gathering and AI-assisted decision-making to their projects and generate results they never would have believed possible. While in the past, potential customers would take a while to assess and consider working with Palantir, Karp says that today he’s seeing a “ravenous whirlwind of adoption.”

Palantir is so optimistic about what’s ahead that it raised its full-year 2025 guidance for revenue to the range of $3.89 billion to $3.9 billion from the range of $3.74 billion to $3.75 billion. The company also lifted its forecasts for U.S. commercial revenue, adjusted income from operations, and adjusted free cash flow. Palantir expects GAAP operating income and net income every quarter this year.

Palantir may succeed, even in a tougher environment

All of this offers us reason to be optimistic about Palantir’s earnings performance in 2025. Even a potentially tougher economic environment may not get in the way, as customers use Palantir’s platforms to make their operations more efficient — something that should help them better navigate economic downturns.

Palantir is a fantastic stock to own — but is it too late to get in on the stock now, considering its price?

It’s true that the valuation I mentioned above generally would be an argument to turn away from a stock. But in the case of Palantir, considering its stellar quarter-after-quarter earnings growth and future prospects, unless you’re a value investor, you may want to set the valuation argument aside.

A forward price-to-earnings ratio looks at potential earnings over the coming 12 months but doesn’t consider earnings five or 10 years down the road. Palantir may be in the early days of its commercial and government business growth story, and as a result, a lot more growth should be ahead.

This means Palantir might not be as expensive as you think — at least if you hold on for the long term. For growth investors who don’t mind seeing the stock potentially dip here and there in the near term and are ready to hold on as this story advances, Palantir makes a solid buy — even at today’s lofty valuation.

Adria Cimino, The Motley Fool, 8 May 2025

Share Recommendations

Palantir. PLTR

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Strategy – Two Wild Investments To Bite The Bullet And Buy

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Palantir is in uncharted territory as far as pricing is concerned. It is valued at almost $300bn for a business whose sales may not reach $4bn this year. But maybe that is missing the point. The addressable market for Palantir looks almost infinite, every government, every organisation, every enterprise on earth, except that they will not do business with countries perceived as enemies of America.

There is even a sense in which the bigger they get, the better they get. Fast growth could be sustained for an astonishingly long period, and with lumpy contracts around like The Golden Dome US defence project, they could have some incredible years. The underlying growth rate for the business outside Europe (the vast majority) was 49pc in the latest year, with no sign of slowdown.

If that rate, or anything like it, is sustained for years, the business will scale at an incredible rate.

Buying the shares is buying a ticket to be part of that and, if and when they fall, as no doubt they will periodically, you can always buy some more. You don’t have to get it right on day one. Their job is to execute on an incredible opportunity. They are well aware of that, and this is a company which is innovating at an accelerating rate.

The more customers they have, the more data and feedback will flood into the business, giving them ever greater problem-solving capabilities. It is a virtuous circle of incredible power.