TLDR
- Palantir’s stock has more than tripled in the past 12 months, driven by AI expansion
- U.S. commercial customer count and revenue surged 73% and 64% year-over-year in Q4 2024
- The company closed 32 deals valued at $10+ million in Q4 with total contract value of $1.8 billion
- Adjusted free cash flow reached $517 million in Q4, representing a 63% margin
- Strong growth projections continue with 2025 revenue guidance of $3.749 billion, up 31% year-over-year
Palantir Technologies has transformed from its origins as a defense contractor into one of the hottest tech stocks in the market. Founded in 2003, the company initially built software to support U.S. government intelligence work.
Over time, it expanded its offerings to other parts of the public sector and later into commercial markets. This evolution has positioned Palantir at the intersection of data analytics and artificial intelligence.
The company’s value proposition is straightforward. It helps organizations analyze vast, complex datasets to make better decisions.
This is accomplished through four major platforms: Gotham, Foundry, Artificial Intelligence Platform (AIP), and Apollo. Each serves a specific market segment or function.
Platform Ecosystem Drives Growth
Gotham primarily serves the defense industry with specialized solutions. Foundry focuses on commercial sector applications across multiple industries.
Apollo ensures both platforms can deliver optimal services by providing rapid and secure updates to customers regardless of their working environment. This infrastructure support is critical for maintaining service quality.
The company’s newest offering, AIP, leverages artificial intelligence technologies including generative AI. This platform allows existing customers to deploy cutting-edge AI on top of their data infrastructure seamlessly.
Customers typically enter contracts ranging from one to five years. In the year ended December 31, 2024, government customers accounted for 55% of revenue while commercial users made up the remainder.
Geographically, the U.S. market dominates with 66% of revenue. International operations generate the remaining 34%.
Palantir’s growth trajectory has been impressive, with revenue expanding 50% over the past two years. However, recent quarters show even stronger momentum in key areas.
The fourth quarter of 2024 was particularly strong. U.S. commercial customer count increased 73% year-over-year.
Revenue from these customers grew 64% compared to the same period in 2023. The company closed 188 commercial deals in the quarter, up 45% from the previous year.
Total quarterly revenue reached $828 million, representing 36% growth year-over-year and 14% sequentially. This performance exceeded many analysts’ expectations.
Government Business Remains Strong
While commercial growth has accelerated, Palantir’s government business continues to show strength. U.S. government revenue increased 45% year-over-year in Q4 2024.
The company closed a record 32 deals valued at $10 million or more. These large contracts contributed to a total contract value of $1.8 billion for the quarter, up 56% from the prior year.
Industry analysts suggest ongoing geopolitical tensions may continue to support demand for Palantir’s defense-related offerings. Global defense spending remains high and could increase further.
Financial Performance Impresses
Palantir’s financial metrics have strengthened considerably. The company delivered an adjusted operating margin of 45% in Q4 2024, its highest ever.
Adjusted free cash flow reached $517 million, representing a 63% margin. This cash generation capability demonstrates the scalability of Palantir’s business model.
The company’s “Rule of 40” score reached 81 in the fourth quarter. This metric, which adds growth rate and profit margin, indicates exceptional performance when exceeding 40.
Management has provided guidance for full-year 2025 revenue of approximately $3.749 billion. This represents expected growth of 31% year-over-year.
The global AI market represents a massive opportunity for Palantir. According to Statista, this market will grow from $244 billion in 2025 to more than $800 billion by 2030.
As an early mover in data analytics software and AI, Palantir is strategically positioned to capture significant market share. Its established reputation and extensive client relationships provide competitive advantages.
The company’s approach focuses on transforming artificial intelligence into practical, high-value solutions rather than just developing theoretical models. This application-focused strategy resonates with customers.
Real-World Impact Demonstrates Value
Palantir’s technology has delivered measurable impacts for customers. One global insurance firm reportedly streamlined a two-week process down to just three hours using Palantir’s solutions.
Another example involves Panasonic Energy North America, which uses Palantir’s AI tools to enhance operations for the production of 5.5 million batteries daily. These use cases demonstrate practical applications of advanced technology.
The company’s AI platform has been central to its recent momentum. It has helped Palantir multiply its U.S. commercial customer base nearly fivefold over the past three years.
Institutional investors have taken notice of Palantir’s performance. According to recent reports, 64 hedge funds held positions in the stock as of Q4 2024.
The company ranked ninth on a recent list of the 12 most widely held stocks by individual investors in 2025. This broad ownership base reflects growing market confidence.
Some analysts have identified Palantir as having potential for substantial long-term appreciation. Market watchers looking for exposure to AI software companies increasingly mention Palantir as a core holding.
While the stock has already seen significant gains, many investors believe the company’s market position and growth trajectory could support further appreciation. Technology companies with strong positions in emerging markets often command premium valuations.
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