Palantir’s Run Feels Unstoppable, But for How Long?

Palantir Technologies (NYSE: PLTR), the data analytics powerhouse, has been one of Wall Street’s most explosive success stories. Since its direct listing in late 2020 at $10 a share, the stock has soared by almost 18-fold gain. Over that same stretch, the S&P 500 hasn’t even doubled.

That kind of outperformance doesn’t happen by accident. It’s been driven by a combination of sticky government contracts, ballooning commercial adoption, and a front-row seat to the artificial intelligence boom. But can Palantir keep compounding at this pace, or is the market already pricing in perfection?

Key Points

• Gotham dominates government contracts, while Foundry rapidly expands in commercial AI.

• Revenue up ~45% in 2025, profits surging, EPS set to more than double.

• At almost 600x earnings, even small setbacks could hit the stock hard.

Two Platforms, Two Moats

Palantir’s empire rests on two flagship platforms. Gotham, designed for national security, intelligence, and defense, is the go-to tool for U.S. agencies that can’t afford to be wrong.

Once embedded, Gotham is notoriously hard to rip out and switching isn’t just costly, it’s politically and operationally risky. That’s why nearly every major U.S. government agency that needs real-time situational awareness is already a client.

The commercial counterpart, Foundry, is where much of the recent growth excitement lies. Foundry helps enterprises integrate fragmented data and build custom AI models to act on it. In effect, it doesn’t just organize your data, it makes it actionable at scale. And because AI initiatives live or die on data quality, Palantir has become a behind-the-scenes enabler for corporate AI ambitions.

In the first half of this year, Gotham still accounted for a slim majority of revenue, but Foundry’s share has surged to 45%, up from roughly a third just a few years ago. That’s a meaningful shift, because commercial customers can expand far faster than government contracts, and they bring diversification beyond geopolitics.

From Growth Wobbles to a New Surge

When Palantir hit the market, management told investors it could grow revenue at least 30% a year through 2025. That looked plausible until 2-3 years ago, when a messy macro backdrop and unpredictable government contract timing slowed momentum. Commercial adoption also cooled as companies trimmed spending.

The last two years flipped the narrative. Heightened geopolitical tension, from Eastern Europe to the South China Sea, has pushed governments to deepen intelligence capabilities, lifting Gotham demand.

Meanwhile, cooling inflation, lower interest rates, and the generative AI gold rush have supercharged interest in Foundry. For 2025, Palantir expects sales to jump around 45%, its fastest growth in years.

Palantir finally cracked sustained GAAP profitability in 2023 and 2024, not just through higher sales, but by tightening expenses and curbing stock-based pay. That consistency earned it a spot in both the S&P 500 and Nasdaq-100 in the past year, milestones that often attract steady inflows from index funds. Analysts now expect earnings per share to more than double in 2025, up 132% year over year.

A Premium That’s Hard to Ignore

Palantir’s entrenched government position gives it a defensive moat, and its proven software is now trusted in mission-critical environments. That’s a reputation few rivals can match. Analysts project revenue to grow at a 37% compound annual rate from 2024 to 2027, with earnings climbing even faster at 63%.

But Wall Street is already pricing Palantir like it’s the only game in town. The stock trades at a stratospheric 581 times earnings and 128 times sales. Even if the price were cut in half, it would still look expensive by traditional growth metrics.

The Bottom Line

Palantir has the growth, the profitability, and the brand power to remain a leader in AI-driven data analytics. But the stock’s meteoric rise has left little margin for error. In a market this euphoric, even a small stumble, whether from contract delays, a shift in AI spending, or regulatory pushback, could knock the share price down sharply.