Palantir Technologies (NASDAQ: PLTR) is arguably the most polarizing stock on Wall Street. The artificial intelligence (AI) and data mining specialist is posting blistering growth, but the rise in its sales and profits has been eclipsed by its burgeoning valuation. This stark contradiction has investors concerned that the bottom will eventually fall out, leaving shareholders holding the bag.
However, three recent developments are helping shift Palantir's risk profile, with its future prospects suggesting the stock may be more reasonably priced than it appears.
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The standard by which all others are measured
Palantir's government contracts gave the company a start, and it continues to build on that foundation. A recent decision by the Department of Defense helps illustrate the long runway for growth ahead.
In a letter that was made public last week, Deputy Secretary of Defense Steve Feinberg advised Pentagon leaders that Palantir's Maven Smart System will be classified as an official "program of record." This designation makes the platform the standard for the battlefield, simplifies adoption, and opens the door to designated funding and long-term use across all branches of the U.S. military. The decision is expected to be implemented by the end of the government fiscal year, which ends Sept. 30.
The Maven Smart System is a battlefield command and control system that collates information from a variety of intelligence-gathering sources, including drones, satellites, sensors, and radar, and analyzes it to identify and prioritize potential targets, including enemy vehicles, buildings, and ammunition and weapons stores.
The system has already been used extensively in the war with Iran. Feinberg said Palantir's Maven Smart System provides warfighters "with the latest tools necessary to detect, deter, and dominate our adversaries in all domains."
This designation paves the way for additional sales of the Maven Smart system across all branches of the military.
Beyond the military
Palantir's reach goes far beyond the military, as its data mining and AI expertise can be used to root out financial crimes.
The Financial Conduct Authority (FCA) is a U.K. regulator responsible for monitoring banks, financial services, and financial markets. Just last week, Palantir was awarded a contract by the watchdog to examine its internal intelligence data, with the goal of identifying a wide range of financial misdealings, including fraud, insider trading, and money laundering.
The three-month pilot program will deploy Palantir's Foundry platform to analyze phone calls, transcripts, social media posts, emails, and other data compiled by the regulator from the 42,000 financial services firms in the U.K. to detect financial crimes that might otherwise go undetected.
If the trial is successful, it could lead to a full procurement of the system.
NASDAQ: PLTR
Key Data Points
Is the Golden Dome Palantir's golden ticket?
One of the signature military ambitions of the Trump administration is the development of a sophisticated missile defense system to protect the U.S. from incoming ballistic, cruise, and hypersonic missiles.
The program, dubbed the Golden Dome, would integrate satellites, radars, sensors, interceptor missiles, and directed-energy weapons to repel incoming attacks by destroying the missiles before they reach their targets. Palantir was awarded a contract as one of the key software developers of the $185 billion Golden Dome project.
Palantir's AI expertise is well-founded, and the software needed to bring this system to life will serve as the framework of the undertaking, linking the detection, identification, and response functions into a single cohesive operating system.
While the value of Palantir's contract hasn't been revealed, Rosenblatt analyst John McPeake estimates its take could be worth "many billions of dollars." For context, Palantir's total revenue in 2025 was roughly $4.5 billion, so a contract of this magnitude could be a game changer for Palantir.
The takeaway
Palantir's Q4 revenue grew 70% year over year to $1.4 billion, marking its 10th consecutive quarter of accelerating growth. Investors have been focused on the U.S. commercial segment, as revenue surged 137% year over year to $507 million, outpacing U.S. government revenue, which jumped 66% to $570 million.
The company's ability to grow its two largest business segments at this frantic pace is a testimony to the usefulness of Palantir's systems. The stock is currently selling for 225 times earnings, which seems egregious at first glance, but it's selling for a much more reasonable 77 times next year's expected earnings.
Moreover, Palantir's remaining performance obligation (RPO), or contractually obligated revenue that hasn't yet been recognized, grew 143% year over year, adding more than $1.6 billion in the fourth quarter alone. The company recently signed a $1 billion software purchase agreement with the Department of Homeland Security, which likely drove its RPO higher.
This helps to illustrate how quickly the equation can change and how a single deal can move the needle. Considering the number of deals bearing Palantir's name over the past few weeks alone suggests its future is bright, and its valuation may not be as high as it seems.
