Staggering Results Yet Still Palantir Shares Are Down

Palantir shares were remarkably strong, with 63% overall revenue growth, a Rule of 40 score of 114, and impressive numbers for TCV (total contract value).

We closed our highest TCV quarter ever at $2.8 billion. Underlying this performance, we closed a staggering 204 deals worth $1 million or more of which 91 deals were worth $5 million or more and 53 deals were worth $10 million or more. In our U.S. commercial business, which now accounts for 34% of our overall revenue. We closed $1.3 billion in TCV, a milestone achievement for the fastest-growing area of our business with a more than 6x year-over-year growth rate on a dollar-weighted duration basis. The trajectory is clear. Customers are converting to larger enterprise agreements in shorter time frames, reflecting both the expanding scope of their AI ambitions and the immediate impact our software delivers.

Ryan Taylor, chief revenue officer, Palantir Technologies, Q3 2025, 3 November 2025

I don’t know where these shares are headed in the short term, but in the long term, Palantir will become a much larger business, one of the Tech Titans. Buying into any decline is like a licence to print money.

On the technology front, what is happening at Palantir is even more amazing.

Our products were built for this moment, and the numbers continue to show it. Realizing value from AI in the enterprise requires the elegant integration of LLMs [Large Language Models] workflow and software. And this is only possible with ontology. Our foundational investments in ontology and infrastructure have positioned us to uniquely deliver on AI demand now and in the world ahead. The most significant product developments are the accelerating progress in our AI applications inside of AIP, our AIP native development agent that understands how to connect to data sources, how to integrate and transform data, how to create ontologies and functions and build applications.

It’s unleashing incredible speed and productivity for our FDEs [Forward Development Engineers] and customer developers alike. At 1 customer, 2 human FDEs spawned an army of AI FDEs to migrate a customer off their legacy data warehouse in 5 days, something that would have taken an army of SIs [Systems Integrators] up to 2 years. This is not a prototype. This is production across our customers, the results are shocking.

AI Hivemind is a new AIP capability that orchestrates a form of a dynamically generated agents to tackle hard problem solving, idea generation refinement and executable proposal generation that is integrated with ontology and therefore, aware of the context of your enterprise. AI Hivemind was originally developed to solve extremely complex problems in the classified space. But it’s already been used to help our commercial customers identify bottlenecks in their supply chain, proactively developing possible solutions and then leveraging AI FDE to code that up into an actual solution.

Shyam Sankar, chief technology officer, Palantir Technologies, Q3 2025, 3 November 2025

The US business, both commercial and government, is on fire.

In addition, we’re raising our full year U.S. commercial revenue guidance to in excess of $1.433 billion, representing a growth rate of at least 104% year-over-year, a 19-point increase over the guidance we gave just last quarter. Accelerating demand for AIP continues to drive the outperformance in our U.S. business overall, which grew 77% year-over-year and 20% sequentially in the third quarter. Our U.S. commercial business grew 121% year-over-year and 29% sequentially and our U.S. government business grew 52% year-over-year and 14% sequentially.

David Glazer, CFO, Palantir Technologies, Q3 2025, 3 November 2025

Sales growth is delivering a ton of cash.

On a trailing 12-month basis, we generated $2 billion in adjusted free cash flow for the first time in the company’s history.

David Glazer, CFO, Palantir Technologies, Q3 2025, 3 November 2025

CEO and co-founder, Alex Karp, is almost spinning with excitement.

And we’re just going to keep going and going and going. And then we’re obviously not going to forecast for next year. But I would say, if you’re thinking about how this company is going to go, look at our ability to value create, look at our ability to create revenue on the top end, look at the unit economics of our business. If you’re a technical expert in how do you evaluate business, evaluate those numbers against any other business you’ve ever seen and then make your decision. But yes, I’m wildly enthusiastic. I think we’re wildly enthusiastic. 

Alex Karp, CEO and co-founder, Palantir Technologies, Q3 2025, 3 November 2025

Just as a crazy for instance, if Palantir compounds sales at 63% for the next five years, sales would reach almost $50bn. Operating profit margins of 51% mean that the group would generate operating profits of $25bn, which starts to put a market value around $450bn into perspective. Free cash flow would be off the scale.

Palantir is a unique jewel of a company with the perfect products at the perfect moment in the greatest revolution in human history. What is that worth? And it is innovating at a ferocious pace, so getting better all the time. Googling became a code word for performing a search; Palantiring may become a code word for making your enterprise dramatically more efficient because that is what its customers are doing.

AI transformation is moving to the C-Suite (the executive floor).

A leading medical device manufacturer signed a multiyear expansion just 5 months after their initial contract, increasing ACV [annual contract value] more than eightfold. 2 weeks into their initial contract, the conversation evolved from a single use case to pursuing the opportunity of becoming an AI-first enterprise. Their CEO approached me to embrace a shared vision for an enterprise-wide AIP deployment to transform their entire organization. This transformation reflects a broader pattern we’re seeing across our customer base. AI is a strategic imperative owned at the C-suite level with executive leadership recognizing the enterprise-wide AI adoption is the defining factor separating the AI haves and the AI have-nots.

We’re seeing C-suite-driven AI transformations across our customers. At a leading insurance company, the CEO has taken personal ownership of their AI transformation, meeting with our team regularly to orchestrate a company-wide transformation around AIP [Palantir’s Artificial Intelligence Platform], reimagining every function from underwriting to claims processing, leading to a significant expansion of our work together. Our partnership with TWG Global named Vergence.ai continues to gain momentum as TWG’s Thomas Tull noted “what was once a competitive advantage is now a competitive necessity.” Companies that fail to incorporate AI into their core operations will be outpaced by those that do. These examples underscore what we are seeing. We are the only platform bringing true transformational impact to the enterprise AI market.

Ryan Taylor, CRO, Palantir, Q3 2025, 3 November 2025

What Palantir can do is incredible.

Basically, just like we’re providing venture results, high-end venture results to normal investors in the last couple of years, what we’re doing actually in enterprise is, is providing a private equity like transformation in the public markets, in the public space under the current leadership. And that’s essentially what our best — and by the way, the other thing Ryan would tell you about is our newer clients have much higher expectations of us. Like they’re like, essentially, I want to transform my business. I want to do it in months. I want to do it in the public eye, while being in the public market, mostly not exclusively.

And I want you to not only do the product side but also tell us how would you actually implement AI, Foundry, Ontology, FDE model and our tribal knowledge to do that. And it’s a completely different game. We used to have to beg and plead to be like — when we first started talking, we were begging and pleading to be at the margin of a problem that could affect a subset of the business. By the way, Shyam, it’s like, unfortunately, can only tell you 1% what he’s involved in. But this is like exactly the same in the U.S. government around the world. It’s like the things that we’re sitting on and working on are like crazy, crazy and important and are not downstream of the problem. They are the problem, and we’re reshaping them.

Alex Karp, CEO, Palantir, Q£ 2025, 3 November 2025

I have been closely involved with stock markets, investing and stock selection for over 60 years. I have personally interviewed countless CEOs and CFOs. I spend my life looking for exciting shares to buy. I don’t know that I have ever seen a company as amazing as Palantir. I used to feel sure they would be worth $1 trillion one day. Make that $10 trillion, and that could even happen within this decade as their business scales in size and boasts ever more transformative technology.

Palantir doesn’t need to build vast data centres. It needs to show its customers in the private sector, in government and in the military how to use them.

I love the way these guys at Palantir think.

And then quickly on your comment on the U.S. government business, like, yes, the number of opportunities out there are great. I can’t comment on all the opportunities you mentioned there, but whether it’s NGC2 [Next Generation Command & Control], the continued growth of, Maven*, I mean we have, of course, America is involved with 3 conflicts right now in the world from Europe, the Middle East and in our own hemisphere right now. And things are getting a little spicy. By the way, let me say something slightly political, and I’m not saying other people agree with this. But when people are attacking our soldiers for stopping fentanyl from coming to this country, I want people to remember, if fentanyl was killing 60,000 Yale grads instead of 60,000 working class people, we’d be dropping a nuclear bomb on whoever was sending it from South America.

Shyam Sankar, CTO, Palantir, Q3 2025, 3 November 2025

*In the context of Palantir, “Maven” refers to the Maven Smart System (MSS), an artificial intelligence (AI)-enabled battlefield analysis and data integration platform developed for the U.S. Department of Defense (DoD) and NATO. It is not the Apache Maven build automation tool. 

The Maven Smart System is designed to fuse data from various intelligence, surveillance, and reconnaissance (ISR) sources—such as drones, satellites, and communications intercepts—into a unified operational picture, allowing military analysts and commanders to make faster, AI-assisted decisions on the battlefield. 

Key aspects of Palantir’s Maven Smart System:

Purpose: The primary goal is to use AI and machine learning to automatically identify potential targets, track assets, enhance situational awareness, and support rapid decision-making in military operations.

Origin: The project (originally known simply as Project Maven) was initiated by the Pentagon in 2017. Google was the initial contractor but withdrew in 2018 following internal protests, at which point Palantir took over the contract.

Technology: MSS runs on Palantir’s platforms (likely Foundry and AI Platform, AIP) and leverages their capabilities for data integration and AI/ML model deployment.

Deployment: The system is widely deployed across various U.S. military branches (Army, Navy, Air Force, Marine Corps, Space Force) and has also been adopted by NATO for enhanced warfighting capabilities.

Significance: It is considered a flagship AI program for the DoD and is a key component of their vision for a networked battlefield, known as Combined Joint All-Domain Command and Control (CJADC2). 

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Strategy – Buy Shares Into Any Decline

Buy the rumour, sell the news is classic stock market behaviour. Palantir has produced spectacular results and is on the greatest role in software history, but it is not immune to the old laws. But once the selling dries up, these shares will head higher again, and the best is still to come.