Data-analytics company Palantir keeps rising, with the firm’s revenue climbing to record highs in Q3 and new customers still flocking to buy its AI tech. However, many analysts are loudly wondering whether they should believe the hype.
Clearly, the rapid adoption of AI is boosting demand for Palantir’s data analytics services. The company has now more than doubled in value this year alone.
Indeed, this was another quarter of record revenue, Palantir said late on Monday. The firm, regarded as the darling of the current US government, reported $1.18 billion in sales for Q3, representing a year-over-year increase of 63%, which translated into a net profit of $475 million.
“It is worth remembering that the business is now producing more profit in a single quarter than it did in revenue not long ago,” Palantir’s CEO Alex Karp wrote in a letter accompanying the earnings release.
In fact, Palantir’s stock has grown in value so fast that it’s now outpacing the gains in the world’s most valuable company, Nvidia. Incidentally, Palantir announced a deal with Nvidia last month to utilize the AI chips in its software, enabling it to run faster.
Revenue from US government contracts was $486 million alone. Palantir, once an awkward Silicon Valley startup, just gained a $100 million deal with the Internal Revenue Service and a $400 million contract from the State Department.
Things seem to be going really well for Palantir, even if some analysts still balk at the firm’s valuation (it has a market cap of $491 billion), wondering whether it can be justified. In a note to clients, RBC Capital Markets wrote last week that it “cannot rationalize why Palantir is the most expensive name in our software coverage.”
Palantir’s shares actually fell in extended trading, although, of course, they have surged more than 175% this year so far.
What does Palantir actually do? Essentially, if somewhat vaguely, Palantir builds data-management software that can centralize and analyze large and disparate datasets.
US President Donald Trump himself touts the company’s technology. However, according to The New York Times, he has also controversially tapped Palantir, initially backed by the CIA, to compile data on Americans.
This means that Palantir’s tech can help soldiers determine the locations of enemy drones, sailors keep tabs on ship parts, immigration officials find unauthorized immigrants, or health officials process and track drug approvals, as The Wall Street Journal neatly puts it.
Unsurprisingly, Palantir’s results have been buoyed by expectations of increased defense spending on its military-grade AI tools – in the US and elsewhere.
It also helps that US President Donald Trump himself touts the company’s technology. However, according to The New York Times, he has also controversially tapped Palantir, initially backed by the CIA, to compile data on Americans.
Indeed, Palantir’s use can be easily seen as controversial. Cybernews has already reported that the company’s success story is also a warning about government surveillance, quoting experts who say that Palantir’s tools could potentially be weaponized and become a cornerstone of authoritarian infrastructure.
More recently, former employees stated that they viewed the company’s support for Trump’s aggressive immigration enforcement as potentially undermining the company’s own civil liberties policies.
Palantir and Karp don’t care for their critics. In his letter to shareholders, the CEO said: “Some of our detractors have been left in a kind of deranged and self-destructive befuddlement.”
Karp founded Palantir together with Peter Thiel, a supporter of President Trump and longtime patron of Vice President J.D. Vance.
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