As an investor, you always have the right to bring your own values into your investing decisions. Some investors avoid companies in certain industries because of their personal concerns. In some cases, they allow those concerns to veto decisions they might otherwise make just looking at those companies' financial results.
One area in which you'll find considerable debate involves how government entities and the private-sector contractors that work with those entities use technology to advance national security and other sovereign interests. Palantir Technologies (PLTR +1.78%) in particular has drawn a lot of attention because of how its data analytics software platform provides insights that the U.S. government and other clients can use to make decisions that affect the public at large.
Yet even though it's important to acknowledge that Palantir is at the center of an impassioned debate among policymakers, that doesn't make it any less valuable to look at the tech company's financial performance in assessing it as a potential investment. Indeed, this second article on Palantir for my Voyager Portfolio focuses entirely on the impressive growth that the company has produced, while leaving it to you to decide how your views on Palantir might affect whether you choose to invest in the stock.
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Paving the way for Palantir's IPO
Palantir spent the first 17 years of its existence as a privately held company. But when it filed paperwork with the U.S. Securities and Exchange Commission in preparation for its 2020 IPO, Palantir revealed financial results that looked quite familiar to frequent investors in tech disruptors. In 2018 and 2019, Palantir was growing its revenue at an impressive rate, and it wasn't all that worried about containing costs as it pursued its aspirations to become a more important participant in the defense-tech industry. Indeed, Palantir lost almost as much money as it brought in in revenue during 2018, and those losses would only widen in its 2020 results immediately after its initial public offering.
Interestingly, investors only briefly got caught up in Palantir's IPO hype. After jumping from an initial reference price of $7.25 per share in the direct listing to as high as $45 per share in early 2021, Palantir stock began a slump that would take it down as low as $6 during 2022's bear market. Much of the downward pressure on Palantir shares came due to the company's need to raise further capital, as it issued an additional $500 million in new common stock during 2021 to repay debt and cover operating expenses.
Out of the red, into the black
Yet like many software companies, Palantir found that as it grew, its margins naturally improved. The marginal cost of bringing new clients onto its platforms was extremely low, and so revenue growth closely aligned with narrowing losses. Between 2020 and 2023, Palantir doubled its revenue, and 2023 marked the first year that the company posted a net profit.
From there, things improved quickly. Revenue growth accelerated in both 2024 and 2025, leading to a doubling of sales during that two-year period. AI-enhanced tools proved wildly popular. Yet overhead expenses didn't come close to doubling, and improvements in gross and net margins allowed Palantir to keep $1.63 billion as profit out of its $4.48 billion in sales during 2025.
Those gains have come from a variety of corners. In the fourth quarter of 2025 alone:
- Total revenue rose 93% year over year.
- Revenue from the U.S. government was up 66%.
- Commercial revenue from U.S. clients soared 137%.
- Total contract value across the business jumped 138% to $4.26 billion.
Moreover, Palantir finished the year with $7.2 billion in cash and short-term Treasury securities. That strengthening of the tech stock's balance sheet marked a huge turnaround from the cash-strapped days early in Palantir's time as a publicly traded company, and it serves as a testament to the massive demand for its software as Palantir has embraced AI tools to enhance its effectiveness.
NASDAQ: PLTR
Key Data Points
What's ahead for Palantir?
Given its financial success, Palantir saw its stock jump as much as 30-fold from its lows before giving back some of its gains in the recent correction. Yet for investors considering Palantir stock now, the question is whether the business can keep expanding at its current rate. The third and final article on Palantir for the Voyager Portfolio will examine this question in depth.
