Palantir: Still Not Entirely Sure What It Does

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Okay, let’s talk Palantir. It’s a company that, even after reading their investor reports, still feels like something out of a Tom Clancy novel. Which, I guess, is the point? The big question, as always with these tech darlings, is whether the hype is actually, you know, supported by something resembling revenue. Investors are understandably twitchy. We’ve all seen this movie before. The AI bubble is inflating, and everyone’s worried about circular deals – basically, companies selling each other AI to justify the AI. It’s like a digital potlatch.

But Palantir just dropped its quarterly numbers, and… well, let’s just say it wasn’t a polite cough. It was more of a full-throated roar. They beat expectations on pretty much everything, and are now predicting revenue growth that would make even the most optimistic venture capitalist raise an eyebrow. It’s like they’re actively trying to disprove the laws of financial gravity.

Let’s unpack this, because honestly, I need a drink. And possibly a flowchart.

A Blowout (Apparently)

The numbers? Impressive. Revenue hit $1.4 billion, up 70% year over year. That’s… a lot. Adjusted earnings per share jumped 79%. They’re basically printing money, which is a good trick if you can get away with it. Wall Street expected $1.34 billion in revenue and $0.23 in EPS. Palantir delivered. It’s like they’re operating in a parallel universe where basic economics don’t apply.

The U.S. government business is up 66%, which, let’s be real, always feels a little unsettling. It’s like they’re providing the digital infrastructure for… something. But the real action is in the commercial sector, up a staggering 137%. They closed 180 deals worth at least a million bucks. That’s a lot of handshakes and signed contracts. And a lot of PowerPoint presentations, I’m sure.

Their total contract value is up 138% to $4.26 billion. Remaining performance obligation soared 143%. Net dollar retention hit 139%. Basically, existing customers are throwing money at them. It’s like they’ve discovered the secret to convincing people they desperately need… whatever it is Palantir sells.

And the “rule of 40” score? A cool 127%. Look, I’m a historian, not a mathematician, but I’m pretty sure that’s… good. It means they’re managing their growth efficiently, or at least, that’s what the consultants tell you.

They’re predicting revenue of $7.19 billion for 2026. That’s a 61% growth rate. It’s ambitious, bordering on delusional. But hey, who am I to judge? I’m just a person who reads financial statements for a living.

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CEO Alex Karp, in the shareholder letter, explained it all with a typically cryptic statement: “The large language models alone will not lead us to salvation.” Apparently, you need Palantir to tether those models to reality. It’s like they’re the digital duct tape holding the AI revolution together. Which, honestly, is a terrifying thought.

The Wall of Worry (and Valuation)

Okay, so they’re growing fast. But here’s the thing: the stock is still… expensive. Like, really expensive. Heading into this earnings report, it was trading at 346 times earnings. Now it’s “only” 146 times forward earnings, or 105 times next year’s expected earnings. It’s still a hefty price tag. It’s like buying a vintage handbag – you know you’re overpaying, but you do it anyway.

But here’s the historical perspective: remember Amazon in the late 2012? A P/E ratio of over 3,600? And yet, look at it now. Sometimes, you have to pay up for growth. It doesn’t mean it’s guaranteed to work, but it’s a risk some investors are willing to take.

Look, Palantir isn’t for everyone. If you’re a value investor, or easily spooked by volatility, steer clear. But if you’re a risk-tolerant investor with a long-term horizon, a small position might be worth considering. Just don’t bet the farm. And maybe, just maybe, read the shareholder letter twice. It’s… dense.

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2026-02-03 18:33