Not many companies can claim they are winning the artificial intelligence (AI) race quite like Palantir Technologies Inc. (NASDAQ:PLTR). While investor sentiment has been divided, the company’s growing adoption of generative AI and its Artificial Intelligence Platform (AIP) positions it as a standout in the enterprise and government software space.
Since launching AIP in 2023, Palantir stock has been supported by increasing usage across public and private sectors. Governments continue to spend on Palantir’s software, while enterprises are accelerating adoption to improve operational efficiency. Profitability is climbing, and the company’s momentum is visible in strong quarterly results, even as broader market weakness and high valuation concerns weigh on shares.
About Palantir Stock
Founded in 2003 and headquartered in Denver, Palantir has transformed into a global technology powerhouse. Its Artificial Intelligence Platform (AIP) integrates generative AI into daily workflows, helping organizations make smarter decisions faster. Palantir’s solutions are widely trusted by governments, militaries, and major enterprises, creating a robust and recurring revenue base.
Currently, Palantir’s market capitalization sits at approximately $399.2 billion. Shares have dipped about 12.2% early in 2026, but the company’s long-term trajectory remains impressive. Over the past three years, PLTR stock has risen 1,891%, and 2025 alone saw gains of 112%, dwarfing the S&P 500 Index’s (NYSEARCA:SPX) 16% gain that year.
Q3 Performance and AI Adoption
In fiscal Q3 2025, Palantir delivered stellar results that underscore its growth trajectory. Revenue jumped 63% year-over-year (YOY) to $1.18 billion, surpassing the $1.09 billion consensus estimate. U.S. revenue grew 77% YOY to $883 million, with U.S. commercial revenue soaring 121% YOY to $397 million, and government revenue up 52% YOY to $486 million.
The company closed a record $2.76 billion in total contract value (TCV), a 151% YOY increase, with U.S. commercial deals more than quadrupling to $1.31 billion. Net income more than tripled to $475.6 million ($0.18 per share) compared to $143.5 million ($0.06 per share) the year prior. Adjusted EPS came in at $0.21, beating the $0.17 estimate.
CEO Alex C. Karp emphasized that Palantir now generates more profit in a single quarter than it did in revenue not long ago, highlighting the company’s scaling efficiency. Additionally, Palantir ended Q3 with $6.4 billion in cash, cash equivalents, and short-term U.S. Treasury securities, providing substantial financial flexibility for growth and innovation.
Looking Ahead: Q4 and Full-Year Guidance
Attention now turns to Palantir’s fiscal 2025 Q4 earnings, scheduled after market close on February 2. Management expects Q4 revenue of $1.327–$1.331 billion. For the full year, revenue guidance has been raised to $4.396–$4.400 billion, with U.S. commercial revenue projected to exceed $1.433 billion, a minimum growth of 104% YOY.
These estimates reflect Palantir’s increasing momentum, driven by adoption of AI platforms and expansion across both government and commercial sectors. Investors will be watching closely to see if the company can sustain this pace into 2026.
Analyst Views on Palantir Stock
Wall Street remains cautiously optimistic. Out of 24 analysts, 8 rate PLTR stock as a “Strong Buy,” 12 remain neutral with a “Hold,” one has a “Moderate Sell,” and three issue “Strong Sell” ratings. Despite this mixed sentiment, price targets indicate upside potential.
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Average price target: $201.52 (~21.6% upside from current levels)
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Most bullish target: $255 (~54% potential gain)
The stock trades at a high valuation, with a forward P/E of 213.48 and price-to-sales ratio of 100.97, compared to sector medians of 25.4x forward earnings and 3.6x sales. These elevated multiples spark debate about whether the stock is overpriced, but growth-focused investors may still pay a premium for Palantir’s AI leadership and government contracts.
Conclusion
Palantir stock remains a compelling AI play, with strong revenue growth, record contract wins, and increasing adoption of its AI platform. While valuation concerns persist, the upcoming Q4 earnings report on February 2 could serve as a catalyst for investors to reassess the company’s potential.
For those seeking exposure to generative AI and enterprise-focused AI platforms, Palantir Technologies (NASDAQ:PLTR) is a stock to watch closely. Its combination of growth, profitability, and government trust positions it as a unique player in a rapidly evolving AI landscape.
Featured Image: Megapixl
