Palantir Technologies has rocketed from obscurity to AI powerhouse, but at $131.34 a share and a $313 billion market cap, is it a screaming buy or a bubble waiting to burst? Down 20% year-to-date after a 1,700% three-year surge, the stock tests investor nerves amid cooling AI hype.
Proven Powerhouse Emerges
Born over two decades ago, Palantir built its name on government contracts before unleashing its Artificial Intelligence Platform (AIP) in 2023. This game-changer lets firms instantly harness AI for data analysis, workflow overhaul, and predictions without building from scratch. Q4 2025 revenue hit $1.41 billion, beating estimates of $1.33 billion, with adjusted EPS at 25 cents versus 23 cents expected.
Valuation Clash
Yet the stock’s forward P/E stays sky-high, sparking sell-off fears in a potential AI downturn. Shares dipped 25% post-earnings despite beats, as traders eyed lofty multiples. Palantir’s revenue increased by 63% year on year last quarter to $1.18 billion.
Both the commercial and government sectors performed well, with commercial revenue up 73% year on year to $548 million and government revenue up 55% to $633 million.
Investors will want to see continued success from both client bases in 2026, but the largest growth will most likely come from commercial clients in the United States.
In the fourth quarter, U.S. commercial revenue increased by a staggering 121% year on year to $397 million, making it the best-performing segment by far. If commercial demand for AI software in the United States remains high, which appears to be a safe bet, Palantir’s stock should rise significantly.
Bold Outlook Ahead
Palantir’s track record of decades of software wins plus AIP momentum positions it to dominate enterprise AI.
With strategic partnerships piling up and AI adoption accelerating, expect 40%+ growth to persist, potentially doubling shares in five years.
Growth chasers: buy the dip.
Value hunters: At current levels, Palantir screams once-in-a-decade potential over peril.
