Growth stocks helped lead the market higher for much of the past two decades. One of the hottest growth stocks of the past few years has been Palantir Technologies (PLTR +1.25%). The stock more than doubled for three straight years from 2023 through 2025, including a monstrous 340% gain in 2024.
However, with the stock pulling back to start 2026, could this be a buying opportunity?
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Palantir offers customers an essential AI operating system
While other software-as-a-service (SaaS) stocks have struggled in the age of artificial intelligence (AI), Palantir has become one of the most important AI companies on the planet. The reason why is simple. It has been able to turn its AI platform (AIP) into an essential operating system that organizations need to make AI more useful in the real world.
Through its Foundry AIP solution, the company can gather an organization's data from a variety of sources and then organize it into an ontology and link it to real-world counterparts. These can be physical assets, like inventory, or concepts, like customer orders. This is important as AI needs clean, structured data to perform its best and avoid hallucinations. Foundry AIP then acts as an orchestration layer for third-party large language models (LLMs) to provide actionable insights based on the organization's data to help them solve real-world problems.
As a result, Palantir's platform has become the go-to solution to turn AI from theoretical to actionable. Meanwhile, with its Bootcamp go-to-market sales model, it can show organizations how to create AI-driven tools based on their actual data in as little as five days. This type of demonstration is helping shorten sales cycles and get new commercial customers to quickly commit. Meanwhile, once Palantir lands a customer, they tend to quickly expand their usage.
NASDAQ: PLTR
Key Data Points
Palantir's success can be seen in its numbers. The company has seen its revenue growth accelerate for 10 consecutive quarters, with revenue surging 70% last quarter. Meanwhile, U.S. commercial customer revenue soared 137% as more companies adopt AIP and existing customers expand. In the fourth quarter (Q4), its customer count jumped 34%, while its net revenue retention, which measures revenue growth from existing customers that have been with the company for the past 12 months, was a robust 139%.
The one knock on Palantir is valuation, as the stock trades at a forward price-to-sales (P/S) ratio of 47 times 2026 analyst revenue estimates. That's pricey, but Palantir is one of the best growth stories in AI and is quickly growing into its valuation. While its current valuation gives me pause, I'd be a buyer on any sustained weakness in the stock price, given the position Palantir has established in the AI landscape.
