Sam Badawi
Stock Analyst, Creator of Origins of Alpha & Quarterly Conviction
Palantir is finally getting the premium it deserves as software returns to favor, with software firms among the biggest buyers of hyperscaler compute. AWS grew 37%, Google Cloud accelerated to 82% and Azure grew 43%, with cloud growth surprising to the upside across all of them; beyond frontier model companies, software is what runs on these platforms. The same Palantir quarter reported last time could have sent the stock down. x.comÂ
Palantir will never trade at a discount in a bull market because it is the very definition of AI for software. Its premium is the price of owning one of the few software companies showing tremendous AI-driven operating leverage, with exposure to both commercial and government clients that peers lack. Thanks to its leadership and execution, big money is always waiting to buy it in size while the bull market lasts, which is why dips below $100 never come. x.comÂ
Palantir may be undervalued because the market values it as a software company while its opportunity is much bigger. It spans AI deployment, government contracts, enterprise adoption and mission-critical data infrastructure, and expensive stocks can stay expensive when the business keeps expanding. x.comÂ
Palantir's government contract activity is growing sharply, supporting its resilience despite the share-price pullback. Its $2.1 billion in 12-month obligations is up 184% from the prior year, among the strongest increases tracked. The Cryptic Bottom Index remains green despite the pullback. Its score is among the highest in the Cryptic Research System, led by growth and profitability, though catalysts and valuation score weakest. x.com x.com x.comÂ
Palantir's reliance on pay-as-you-go service with refunds makes customer cancellations and sudden earnings declines or write-downs a serious risk as AI and high SaaS prices pressure the business. Its 10-Q warns of these risks. Anthropic can and will easily replace Palantir with an all-in-one platform under Democratic control of the legislative branches. x.com x.comÂ
Continued improvement in fundamentals and technicals could carry Palantir to megacap scale. A $1 trillion market cap is a realistic destination for strong growth companies, and Palantir appears on that path, though its timing is uncertain. Drawdowns remain opportunities to accumulate until the thesis changes. x.comÂ
Palantir is an AI business, not an AI story, and its execution is hard to ignore. Per its Q2 results, revenue rose 93% to $1.94B, beating estimates, and US commercial revenue grew 149%, with Q3 guidance above expectations. Software-sector weakness and a rich valuation weigh on the stock, but it is a very compelling buying opportunity for long-term investors. x.com x.comÂ
Palantir looks stretched again, back at about 69 times sales. Michael Burry added March 2027 Palantir puts after covering half his shorts near $107. A further run to $187-$198 would be the better level to lean bearish, and with software stocks running hot for two weeks, the whole trade may top out for a breather. x.com x.comÂ
Palantir deserves to trade at a premium because it operates on a different level from the rest of SaaS in converting AI demand into actual customer value. The long-term view is ultra bullish. x.comÂ
Palantir's blowout quarter shows software is far from finished. Revenue grew 93% YoY and GAAP EPS more than 200%, pushing its P/E down toward 50. x.comÂ
Palantir is a worse business than CrowdStrike, Cloudflare and Datadog and is at the tail end of its acceleration cycle, while the cybersecurity supercycle may just be starting. So its fall to half CrowdStrike's and Snowflake's EV-to-operating-income multiple, noted by @CoorsLightCEO, makes sense once anchoring is removed. All of them are overvalued, though. x.comÂ
Palantir's accelerating commercial growth, sticky contracts and high margins make it a standout aggressive growth name despite its premium valuation. Q1 2026 revenue rose 85% to $1.63B, US commercial revenue grew 133% and government 84%, and full-year guidance was raised to about 71% growth. CEO Alex Karp cites overwhelming demand it cannot fully meet, showing real platform adoption rather than hype. x.comÂ
