Palantir Technologies stock has surged significantly, driven by optimism surrounding its artificial intelligence software platform. The company reported double-digit revenue growth in recent quarters, with demand described as strong.
Palantir Technologies has delivered double-digit revenue growth in recent years, achieving profitability and increasing it. The company noted high demand, particularly from commercial customers, which may fuel further growth.
Investors have responded by buying the stock, leading to a 2,400% increase over three years. Despite this momentum, concerns have emerged about the stock's valuation, which some analysts view as unsustainable.
The valuation has declined nearly 40% from a peak in November. Palantir, founded two decades ago, initially grew through government contracts. Its software platforms help customers aggregate, analyze, and utilize data.
In recent years, commercial customers have become a key growth driver. Palantir had only 14 U.S. commercial customers a few years ago, but the launch of its Artificial Intelligence Platform accelerated growth. AIP enables customers to quickly apply AI to develop solutions.
Companies are eager to adopt AI for efficiency and innovation, and Palantir provides a way to capitalize on this trend. Revenue has grown in double digits across government and commercial segments in recent quarters.
The commercial business shows potential for further expansion, with customer numbers now in the hundreds. Contract values have risen sharply, with U.S. commercial total contract value increasing over 300% to $1.3 billion in a recent quarter, setting a record.
Palantir maintains profitability alongside growth, measured by the Rule of 40. Its score has exceeded 40% in recent quarters, reaching 114% in the latest reading.
Quarterly revenue stands at nearly $1.2 billion, with GAAP net income of $476 million. The stock remains expensive by common metrics, even after the valuation dip.