Palantir Technologies' stock has increased by nearly 172% over the past 12 months, making it one of the top performers in the generative AI software sector in 2025. The company's technology-led patriotism has drawn criticism but also cultivated a dedicated following, contributing to its recent growth.
Founded in 2003, Palantir has provided big data analytics to clients such as the U.S. Department of Defense and the CIA. It reportedly assisted in tracking Osama bin Laden and supported the first Trump administration with migrant interdiction and deportation efforts.
Palantir's software-as-a-service offerings analyze large datasets to identify trends for organizational decision-making. Generative AI has accelerated this process, allowing real-time insights through simple prompts.
The company launched its Artificial Intelligence Platform on April 7, 2023. Since then, shares have surged over 2,000%, indicating market confidence in the new AI functionality.
In the third quarter, revenue rose 77% year-over-year to $883 million. U.S. commercial business grew 121% to $397 million, accounting for 44% of total revenue. This segment is expected to become the majority of Palantir's revenue in the coming quarters.
Historically, Palantir's economic moat stemmed from government ties, including funding from the CIA's In-Q-Tel and experience with classified information. Many employees hold security clearances, and the company has maintained controversial military contracts, such as the U.S. Army's Maven Smart System, which Google abandoned.
In commercial data analytics, Palantir faces competition from companies like Snowflake and Microsoft Fabric. Its AI Platform integrates with third-party large language models such as Grok, ChatGPT, and Claude, without a proprietary edge in LLMs.
The stock trades at a forward price-to-earnings ratio of 173, significantly above the S&P 500 average of 22. While growth and a cult following reduce crash risks, shares may stabilize in 2026 until earnings align with expectations.
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