Palantir: A Venture of Some Promise

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It is with a degree of observation, not unmixed with curiosity, that one regards the recent performance of Palantir Technologies (PLTR +4.69%). The company’s earnings, reported in early February, were, by all accounts, quite substantial, with revenue experiencing a surge of seventy per cent over the preceding year – a rate of increase that, whilst impressive, naturally invites a closer scrutiny of its foundations.

The principal difficulty for those contemplating an investment lies, as is so often the case, in the matter of valuation. The shares, it must be admitted, are not lightly acquired, trading at a considerable premium – forty-eight times forward sales, and a hundred times earnings – a circumstance that has understandably given pause to even the most sanguine of observers. Many acknowledge the quality of Palantir’s undertaking, yet the prevailing sentiment amongst those who pronounce upon such matters appears to be one of cautious reservation, as evidenced by the continued ‘hold’ rating assigned by the majority of analysts. Such a judgement, whilst perhaps lacking in enthusiasm, is not entirely without justification, given the aforementioned expense.

There exists, it is true, a degree of general disquiet within the software sector, and a certain wariness towards novelty. However, one finds reason for continued interest in Palantir, and a belief in its potential for long-term prosperity. It is not merely a provider of software, but rather, a constructor of systems.

Palantir: Architect of Industry-Wide Systems

The company’s annual report, a document of some length and detail, reveals a strategy that, if successfully executed, could prove exceedingly advantageous. It is stated, on page seven of the 2025 Form 10-K, that their platforms have become integral to the operation of entire industries. They aspire to create industry-wide operating systems, enabling companies and governmental bodies to manage their affairs with greater efficiency. The intention, it would seem, is to distribute their software on a grand scale, establishing a network of interconnected institutions.

Palantir does not merely seek to secure contracts with individual companies; it aims to become the standard, the very foundation upon which entire industries are built. Their progress in this regard is already noteworthy, with commercial revenue increasing by an impressive one hundred and thirty-seven per cent year over year. As they continue to pursue this ambitious goal, their competitive advantage will, one anticipates, become increasingly secure.

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Once Palantir has established a relationship with a healthcare provider, for instance, it becomes considerably easier to forge partnerships with hospitals and other entities within the medical supply chain. This is not merely a matter of embedding itself within a single company’s operations, but of becoming the essential operating system for the entire industry. Management suggests that these industry-wide connections will, in time, have a significant impact on the company’s fortunes.

The company demonstrates a considerable engine for growth. The majority of the top ten automotive manufacturers, it is noted, utilize Palantir’s services, which explains their reach to over thirty additional suppliers within the same sector. It is a network, carefully cultivated and expanding with each successful engagement.

A Consideration of the Longer View

Analysts predict that Palantir’s revenue will more than triple from its current level to exceed fourteen billion dollars by 2028. Valuation, of course, is a matter of some concern, and the shares may well underperform in the short term, even as the business continues to meet, or even exceed, expectations. It is a common observation that impatience is rarely rewarded in matters of finance.

However, the longer one’s perspective, the greater the correlation between a company’s performance and the value of its shares. It is for this reason that one has chosen to acquire a modest holding in Palantir, and to gradually increase it over time. It is, in essence, a wager on the company’s ability to execute the strategy outlined in its annual report – a strategy that suggests a considerable runway for future growth. One hopes, naturally, that the venture proves to be a prudent one.

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2026-02-25 20:32