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Palantir Technologies (NASDAQ:PLTR) started as many companies do: Its founders (Peter Thiel, Stephen Cohen, Joe Lonsdale, and current CEO Alex Carp) couldn't find the right solution for their needs. In this case, they needed software technology that allowed collaboration without sacrificing data security. That led them to start building Palantir in 2003.
At its core, Palantir Technologies is a software company. It builds digital infrastructure to help organizations better manage their secure data. Its focus on data security has made it a key software provider for the U.S. government and large corporations.
Palantir has also begun leveraging its expertise in data by providing customers with artificial intelligence (AI) solutions to help them get the most from their data. The company launched its Palantir Artificial Intelligence Platform (AIP) in 2023. It has quickly become an AI leader, with unrelenting demand for its leading capabilities.
Palantir's AI-driven growth potential might have you wondering how to invest in its stock. Here's a step-by-step guide on how to buy stock in the data software company and some factors to consider before adding shares to your portfolio.
Investors considering buying Palantir Technologies stock will need to take a few steps before becoming shareholders. This six-step guide will show you how to add the data software company to your portfolio:
Examining all the data and doing your due diligence is essential before buying shares of any company. This process might confirm your investment thesis or change your mind about buying shares.
Here are a few factors that could lead you to buy shares of Palantir:
On the other hand, here are some things that might lead you away from buying its stock:
Crunching the data on a company's profitability is crucial to researching a stock. Historically, profit growth is a key driver of stock price returns over the long term. Here's a closer look at Palantir Technologies' profitability.
Palantir Technologies' earnings are growing rapidly. The company's generally accepted accounting principles (GAAP) net income was $214 million ($0.08 per share) in the first quarter of 2025, more than double the $105 million from a year earlier.
Palantir is also generating growing free cash flow. It produced $370 million of adjusted free cash flow during the first quarter of 2025 (a robust 42% margin). That grew its cash balance to more than $5.4 billion at the end of the third quarter (including cash, equivalents, and short-term U.S. Treasury securities). The balance allowed the company to start returning cash to investors via a $1 billion share repurchase program in mid-2023.
The company believes its revenue, earnings, and cash flow will continue growing, driven by robust demand for its AIP. That growing profitability could help drive its share price higher in the future.
Palantir Technologies had not yet started paying a dividend as of mid-2025. While the data analytics company hadn't started making dividend payments, it had begun returning cash to shareholders.
Given that it has only recently started earning a profit and launched a share repurchase program, the company likely won't initiate a dividend anytime soon.
Investors who are unsure whether they want to invest directly in Palantir stock can still gain some exposure to the data software company. An alternative strategy is to make a passive investment by purchasing a fund that holds its stock. One of the most common passive investment vehicles is an exchange-traded fund (ETF).
According to ETF.com, 374 ETFs held more than 390.4 million shares of Palantir Technologies as of mid-2025. The Vanguard Total Stock Market ETF (NYSEMKT:VTI) was the biggest holder, with more than 66.6 million shares. However, the fund had only a small allocation to Palantir, so it might not be the best way for investors to gain passive exposure to the data company.
On the other hand, the REX AI Equity Premium Income ETF (NASDAQ:AIPI) had the biggest allocation, at 9.4%. Palantir was the fund's third-largest holding, making the ETF a potentially attractive alternative option for investors seeking exposure to the data software company.
Palantir Technologies didn't have an upcoming stock split on the calendar as of mid-2025. The data specialist had not completed a stock split since its direct public market listing in 2020.
Shares of Palantir surged in 2024 and through mid-2025, reaching around $135 towards the end of June. That was their highest level since going public. The stock had rocketed by more than 1,300% since its listing. If shares continue rising, Palantir might need to consider a stock split.
Palantir Technologies co-founder and CEO Alex Karp is extremely optimistic about the future. In the company's first-quarter 2025 earnings release, he stated: "We are in the middle of a tectonic shift in the adoption of our software.” Karp also noted that: "We are delivering the operating system for the modern enterprise in the era of AI."
There's a lot of competition in the AI space. However, Palantir has positioned itself as an early winner. That makes it a potentially compelling investment opportunity for those seeking exposure to the AI megatrend.
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