Palantir Stock is Skyrocketing as its AI Tech Promises Big Gains

Palantir Technologies (NASDAQ: PLTR) has been making big waves in the stock market, with its stock price jumping over 20% in one day and soaring 500% in the past year. The main reason for this excitement is the company’s strong financial performance and its growing role in artificial intelligence (AI). The company’s AI Platform integrates AI into operations to enhance data processing, workflow automation, and predictive analytics. The platform streamlines decision-making and risk management while driving software adoption through licensing, professional services, and market expansion.

Breaking Down Palantir’s Success

Palantir specializes in software that helps organizations analyze large amounts of data, originally for government agencies but now expanding into business use. In the last three months of 2024 (Q4), the company made $827.5 million in revenue, which is 36% higher than the same time last year and well above the expected $777.5 million. That means Palantir is making more money than analysts predicted, a big reason why investors are excited.

Palantir also demonstrated strong operational efficiency with the company, generating a significant amount of money within a short period of time. It pulled in $460 million in operating cash flow and $517 million in adjusted free cash flow, meaning it has plenty of money to reinvest in its business and continue growing. Its earnings per share (EPS)—a key measure of profitability—came in at $0.14 per share, beating expectations of $0.11. Palantir has now outperformed Wall Street estimates for nine quarters in a row, showing it has strong and consistent growth.

Looking at Palantir’s performance over the full year, for all of 2024, their revenue hit $2.87 billion, up 29% from last year. More importantly, the company is becoming much more profitable. In 2023, Palantir only made $0.08 per share, but in 2024, that jumped to $0.41 per share—a 400% increase. This means the company is not just growing but doing so efficiently, generating $1.15 billion in operating cash flow for the year.

Palantir’s AIP: From Government Intel to Industry Player

Palantir Technologies, known for its AI-driven intelligence solutions, helps both commercial businesses and government agencies manage vast amounts of data to drive better decision-making. Co-founded by billionaire investor Peter Thiel, the “PayPal mafia don,” Palantir has grown into a major force in the software industry. Since its launch in 2003, the company has focused on government intelligence and defense through its Gotham platform, introduced in 2008. In 2016, Palantir expanded into commercial markets with its Foundry platform, aiming to become the go-to data operating system for industries worldwide.

Now, with artificial intelligence playing a bigger role in business and security, Palantir’s AIP technology is in high demand. Palantir AIP integrates AI into existing operations, enabling data processing, workflow automation, and predictive analytics. It supports decision-making, process optimization, and risk management for businesses and government agencies. The platform’s features include AI-driven automation, trend analysis, and data integration, helping organizations streamline operations and allocate resources efficiently. Palantir aims to drive software adoption and revenue growth through AIP by offering licensing, professional services, and market expansion. Demonstrations highlight its applications across industries, positioning it as a tool for AI-driven enterprise solutions.

In 2024, Palantir made a move in the biotech space featuring a multi-year deal with Parexel. The move was directed at enhancing clinical data delivery, highlighting the growing role of AI in clinical trial operations. The agreement marked Palantir’s first entry into contract research, integrating its AI-driven Foundry platform to streamline data management and accelerate drug development. Parexel executives reported that the technology had already reduced data delivery times by 50% and saved hours on study design. The AI platform automated manual processes, improved data accessibility, and enhanced trial coordination, providing sponsors with faster insights into trial performance and drug approvals.

What’s Next for Palantir?

Looking ahead, Palantir expects its revenue in the first three months of 2025 to be between $858-$862 million, much higher than the forecast of $797.85 million—suggesting 26% growth. For the entire year, Palantir predicts making $3.74-$3.76 billion, which is better than analysts’ estimates of $3.54 billion. This strong outlook reassures investors that the company’s growth isn’t slowing down.

Palantir CEO Alex Karp, known for his bold statements, described the company’s sales momentum as “unlike anything that has come before” and expressed confidence that Palantir will lead a “revolution in the U.S. over the next three to five years.”

Palantir is proving that it can grow rapidly while also becoming more profitable, which is why investors are rushing to buy its stock. The company’s expertise in AI is attracting new customers, and its financial strength gives it room to expand. With Wall Street analysts likely to revise their earnings forecasts even higher, Palantir’s stock may continue its upward momentum.

Author

Bernice Lottering