Palantir Technologies (PLTR +1.69%) is set to report its fourth-quarter fiscal 2025 earnings results on Feb. 2. Once known primarily as a data analytics player focused on the government and defense sector, the company is now increasingly viewed as a mission-critical enterprise artificial intelligence (AI) platform with accelerating momentum across both government and commercial clients.
But does that shift in narrative make the stock a buy now? Let's find out.
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AIP catalyst
Palantir's Artificial Intelligence Platform (AIP) and its highly effective go-to-market strategy are proving to be the most important growth engines.
In the third quarter, U.S. commercial revenues increased 121% year over year to $397 million. This was driven by the rapid adoption of AIP by both existing and new customers, not only for isolated use cases but also for C-suite-led enterprise-wide transformations. The company's AIP Bootcamps enable clients to deploy AIP in real-world production-grade use cases within a few days, thereby shortening sales cycles.
NASDAQ: PLTR
Key Data Points
Palantir also stands to benefit from the rapid evolution of agentic AI capabilities within AIP, including AI FDE and AI Hivemind. An AI FDE development agent autonomously connects to various data sources, integrates and transforms data, creates ontologies (a framework that helps relate enterprise physical assets to digital twins or counterparts), and builds applications for enterprises at exceptionally high speed and productivity levels.
AI Hivemind is used to orchestrate agents for problem-solving, idea generation and refinement, and the generation of executable proposals. Together with Edge Ontology, which enables clients to use ontology on mobile devices and embedded systems, Palantir is strengthening AIP's value proposition.
Other growth drivers
Palantir's government business is also showing signs of strength. In August 2025, the company entered a contract worth up to $10 billion with the U.S. Army, consolidating 75 legacy software contracts into a single enterprise agreement for the next decade. The deal has improved Palantir's long-term revenue visibility while also standardizing Palantir's software across the Army.
In December 2025, the U.S. Navy also authorized up to $448 million to deploy Palantir's Foundry and AIP across the Maritime Industrial Base. Citigroup analyst Tyler Radke expects the company's government revenues to grow 51% year over year in fiscal 2026, with a bullish growth estimate even exceeding 70%.
Palantir is already generally accepted accounting principles (GAAP) profitable and free-cash-flow positive. The company's inclusion in the S&P 500 index in 2024 has also widened institutional ownership, reducing sentiment-driven volatility.
Is it a buy?
Despite the many tailwinds, Palantir's valuation is too high to ignore. The company trades at nearly 167.2 times forward earnings, which is very expensive. This leaves little room for execution missteps or softer-than-expected future outlook. Any earnings miss or unfavorable event can translate to a sharp share price drawdown for the company.
Hence, while the company's fundamentals are robust, the premium valuation makes it essential for retail investors to size positions carefully and be prepared for future volatility. Investors can consider picking a small stake now and gradually building a bigger position by opting for a dollar-cost-averaging strategy in the coming months.
