Palantir’s Path to $10 Billion: Can This AI Giant Keep Growing?

Palantir Technologies (NYSE: PLTR) has emerged from a growth slowdown into a phase of reaccelerating revenue and improving profitability in 2024-2025. After a modest ~17% revenue growth in 2023, Palantir’s top-line expanded by 29% in 2024 to $2.87 billion, buoyed by rising demand for its data analytics and AI platforms.

The company also achieved GAAP profitability, marking six consecutive quarters of positive earnings through end-2024.

So we wanted to figure out where Palantir would end up at the turn of the decade in 2030 through a comprehensive, fundamentals-driven outlook. How high can Palantir reasonably get to?

Key Points

• Palantir’s revenue surged 29% in 2024 to $2.87B, with projections reaching $10B by 2030 (CAGR ~20%).

• High 79% gross margins and improving GAAP profitability could push net margins to 25% by 2030, with $3B+ in annual free cash flow.

• Current valuation already factors in aggressive growth, limiting upside potential.

Revenue Growth Projections to 2030

Revenue growth has sharply accelerated, thanks in part to new AI-enabled product offerings and strong U.S. commercial demand. Management’s outlook for 2025 calls for 31% year-over-year revenue growth, with a midpoint of ~$3.75 billion in revenue, significantly above prior consensus estimates.

This fast growth trajectory is expected to moderate gradually as the revenue base expands, but remain strong through the decade. Our projected revenue from 2024 to 2030 is as follows:

• 2024 (actual): $2.87 billion revenue (29% YoY growth)
• 2025 (guidance): ~$3.74–3.76 billion (≈31% YoY growth)
• 2026 (forecast): ~$4.7 billion (≈25% estimated).
• 2027 (forecast): ~$5.9 billion (≈25% YoY est.).
• 2028 (forecast): ~$7.2 billion (≈22% YoY growth, est.).
• 2029 (forecast): ~$8.7 billion (≈20% YoY growth, est.).
• 2030 (forecast): ~$10.0 billion (≈15–18% YoY growth in 2030, est.).

These forecasts assume Palantir will capitalize on rising enterprise and government demand for AI-driven data analytics.

In 2024, U.S. commercial revenue grew 54% YoY to $702 million thanks to surging interest in Palantir’s Artificial Intelligence Platform. It’s within reason to expect high-teens to high-20s percentage growth in the later 2020s as Palantir’s customer base widens and large clients expand their spending.

By 2030, we can reasonably assume revenue around the $10 billion mark, roughly 3.5× Palantir’s 2024 sales, implying a healthy long-term CAGR in the low-20% range, tapering from the 30% levels of mid-decade to the high-teens by 2030 as the company matures.

This kind of growth is predicated on Palantir’s ability to integrate advanced AI into its platforms and convert its pipeline into sustained sales.

Profitability and Cash Flow Outlook

Improving profitability is a key component of Palantir’s valuation story because it operates a software business with very high gross margins of nearly 79% as of Q4 2024, which provides substantial operating leverage.

While heavy investments and stock-based compensation have historically depressed GAAP earnings, the trend is now positive. Palantir recorded GAAP net income of $79 million in Q4 2024, equivalent to approximately a 10% net margin.

Last year was the company’s second full year of GAAP profitability with GAAP profit more than doubling vs 2023. This marks a meaningful turnaround from prior losses and threw a spotlight on the fact that Palantir’s core operations can be profitable even under GAAP accounting as revenues spike.

On an adjusted basis, excluding SBC and other non-cash costs, Palantir’s profitability will turn heads of those who slept on it. In Q4 2024, adjusted operating income was $373 million, yielding a 45% adjusted operating margin. This far exceeds the typical “Rule of 40” benchmark (the sum of growth rate and profit margin) that investors use to gauge healthy growth companies. It shows also Palantir’s strong underlying earnings power once the weight of SBC is normalized.

Looking forward, investors can expect steady margin expansion through 2030 as Palantir continues to scale. Why do we say that?

Well, we assume gross margins will remain in the high-70s% to ~80% range because of Palantir’s software-centric business and cloud infrastructure efficiencies. The sky high gross margins mean each incremental dollar of revenue contributes significantly to profit once fixed costs are covered.

R&D and SG&A costs can reasonably be expected to climb at a slower pace than revenues, which in turn will translate to an operating margin boost.

GAAP operating margins should turn firmly positive and rise into the 20%-plus range by 2030 as the business achieves greater scale. Keep in mind that Palantir’s GAAP operating margin in Q4 2024 was just ~1% due to large SBC, but adjusted op margin was 45%.

Our expectation is that Palantir will gradually reduce SBC as a percentage of revenue over the forecast period. SBC has been a double-edged sword because it boosts operating cash flow by ~$780 million in 2024, comprising 66% of cash from operations but causes dilution and depresses GAAP earnings.

Management has indicated a commitment to moderating dilution. As a result, it’s reasonable to assume SBC expense growth trailing revenues, which allows GAAP net margins to improve significantly by 2030 (into the mid-20% range.

Palantir already generates strong cash flows. In 2024, cash from operations was $1.15 billion, a 40% operating cash flow margin on revenue. Free cash flow was similarly high, as Palantir’s capital expenditure needs are minimal. We expect annual FCF to track near net income, excluding SBC effects, over time.

By 2030, with expanding margins, Palantir’s annual FCF could approach 30% of revenue in our model. This means several billions of dollars of FCF annually by 2030, roughly $3 billion or more in a base case.

The bottom line is Palantir is likely to transition into a highly profitable platform company by 2030 where net margins are forecast to rise from low-single-digits in 2024 to ~25% by 2030, as revenue growth and disciplined cost management yield economies of scale.

Adjusted profitability will remain high throughout. Palantir should consistently post adjusted operating margins well above 30% each year. This profitability trajectory is critical to the DCF valuation, as it drives the free cash flows that underpin Palantir’s intrinsic value.

How Valuation Was Calculated

Our DCF is based on annual free cash flow forecasts from 2025 through 2030, plus a terminal value representing all cash flows beyond 2030. As part of the forecasts we assume revenue grows from ~$2.87B in 2024 to roughly $10B by 2030, a ~22% compound annual growth rate. Growth is front-loaded (30% in 2025, high-20s % in 2026-27) and tapers to high-teens by 2030 in the base case.

GAAP operating margins are projected to climb toward ~20-25% by 2030, with FCF margins around 30% by 2030 as a result of strong cash conversion and still some contribution from SBC add-backs.

For interim years, we gradually increase FCF margin from ~40% in 2025, similar to 2024’s level down to ~30% in 2030 as SBC impact normalizes. This yields projected free cash flow of roughly $1.5B in 2025, growing to about $3–4B by 2030 in our model.

We use a 10% discount rate to present-value future cash flows, Palantir’s weighted average cost of capital, which for a debt-free, equity-funded high-growth tech company is largely driven by the cost of equity. A 10% rate reflects the stock’s risk profile and investor return expectations for a company of Palantir’s size and volatility.

For the period beyond 2030, we assume a terminal growth rate of 3% per year, roughly in line with long-term global GDP/inflation growth, reflecting a mature growth stage.

Terminal value is calculated at the end of 2030 as FCF2031 divided by (WACC – g). With 2030 FCF in the ~$3+ billion range, this terminal value represents the present value of all cash flows from 2031 onward.

Cross-checking against an implied exit multiple, our terminal value corresponds to about a 15× multiple on 2030 FCF, a reasonable multiple for a software company still growing in the mid-teens at that time.

Calculating The Valuation Using Discounted Cash Flow

Discounting each year’s projected FCF to present at 10% and summing with the terminal value gives us an estimated enterprise value for Palantir of approximately $45–50 billion.

Palantir holds significant net cash of over $2.4B in cash and no debt as of late 2024, which we add to EV to get equity value. This results in an equity value of roughly $48–53 billion for the company.

To translate this into a stock price, all that needs to be done is to divide by the shares outstanding. Palantir currently has about 2.3 billion diluted shares, including Class A, B, and warrants/RSUs. Accounting for moderate dilution through 2030 from ongoing SBC issuance and modeling ~2.5 billion shares by 2030, the DCF implies a value of around $20–22 per share on a present value basis.

If you’re wondering why analysts who have been around the block think Palantir is overvalued, well it’s these cash flows that are the reason. The company needs to grow much faster than the Street expects to justify its current share price and valuation.

With that said, if Palantir executes on these projections, by 2030 the company would be producing ~$3–4B in annual free cash flow and growing still at ~15%. At that point, investors might value Palantir at a higher multiple than our conservative terminal assumption.

Even sticking with our DCF, the intrinsic value per share in 2030, in future dollars, would be significantly higher than today’s: roughly $35–40 per share by 2030, given the business’s growth over the period.

In other words, if the stock’s fair value today is around $20 based on future cash flows, an investor holding through 2030 might well see the stock appreciate into the mid-$30s as those cash flows materialize.

It’s worth emphasizing that our DCF is sensitive to assumptions. For instance, if Palantir can sustain higher growth of say 25%+ into the late 2020s or achieve higher end-state margins, the 2030 outcome could be more bullish – a scenario could yield well over $50/share by 2030. Regardless, though, it’s hard to end up with a $100+ price target.

What Could Go Wrong?

Palantir’s growth assumptions rely on ongoing traction in both government and commercial segments. In fact, Palantir’s momentum has been hurt before by slowing government deal flow, which at one point led to a noticeable stock pullback.

Government agencies, especially U.S. federal contracts, still make up a substantial portion of Palantir’s revenue. Over 40% of Palantir’s sales in late 2024 came from the U.S. government sector, a concentration mix that exposes Palantir to political and budgetary risk.

The data analytics and AI platform market is heating up. While we aren’t comparing Palantir to specific peers here, it’s clear that numerous technology vendors and cloud providers are investing in similar AI-driven analytics solutions. Palantir could face pricing pressure or market share loss if rivals start to catch up.

Our model assumes significant margin expansion, but Palantir needs to manage large R&D and sales investments to unlock operating leverage. If expenses grow in tandem with revenue or unexpected costs arise, such as higher cloud infrastructure costs, legal/regulatory expenses, expect operating margins to lag our estimates.

Palantir’s work with sensitive government agencies, especially defense and intelligence, as well as involvement in handling large-scale data analytics pose regulatory and public perception risks.

What Will Palantir Stock Be Worth in 2030?

A discounted cash flow analysis reveals that a $35–40 per share price range by 2030 is a base case scenario that investors can expect after current bullish momentum abates.

The DCF-based analysis suggests that if Palantir sustains healthy double-digit revenue growth and steadily grows margins the company may well generate substantial free cash flow by 2030 that will support a $35-$40 per share price.

In a base-case scenario, we estimate Palantir’s stock may well trade around the mid-$30s per share by 2030, given the projected financial performance, equating to a market capitalization supported by ~$10B in revenue and robust profitability at that time.

Still, the margin of safety appears slim at present valuations. And it’s not an overstatement to say the current stock price already anticipates aggressive growth.

So, Palantir’s 2030 valuation will hinge on fundamental drivers, primarily revenue growth from AI-fueled demand, ballooning operating leverage, and strong cash generation.