Topline
Recent stock market favorite Palantir notched another milestone Tuesday, surging after its latest earnings report to join an elite group of U.S. firms worth more than $200 million as the software giant benefits handsomely from its “position at the center of the AI revolution,” as its billionaire CEO Alexander Karp describes it.
Palantir CEO Alex Karp
Key Facts
Shares of Palantir jumped 27% shortly after 10 a.m. EST, registering a record share price of more than $106, as investors reacted overwhelmingly positively to the firm’s fourth-quarter earnings report released Monday afternoon.
That sent Palantir’s market capitalization to as high as $240 billion, making it more valuable than household names like the $221 billion American Express, $208 billion McDonald’s and the $207 billion Disney.
Palantir is now the 47th “mega-cap” publicly traded American company valued at $200 billion or more.
The rally came after Palantir greatly exceeded expectations in its quarterly results and financial outlook, as Q4’s record $0.14 adjusted earnings per share and $828 million in revenue beat consensus analyst estimates by 26% and 7%, respectively, according to FactSet.
Palantir’s 2025 guidance for $3.74 billion to $3.76 billion in sales and $1.5 billion to $1.7 billion in adjusted free cash flow called for about 30% respective top and bottom line growth.
Key Background
Palantir’s rise has been meteoric, as its stock is up more than 10 times its value two years ago, when its market cap sat below $20 billion. Government contracts accounted for 55% of the company’s revenue in 2024. Palantir provides AI-enabled data analytics insights to its customers, which include Amazon and the Department of Defense. Palantir was the S&P 500’s best-performing stock of 2024 and is off to a hot start to 2025, gaining 40% thus far.
Forbes Valuations
Karp’s net worth swelled by $1.5 billion Tuesday from $7.8 billion to $9.3 billion, vaulting him from the 374th-richest person in the world to the 281st-richest. Palantir cofounder Peter Thiel’s fortune jumped by $2.9 billion from $15.9 billion to $18.8 billion, making him the 106th-wealthiest person on the planet.
Crucial Quote
“We’re doing it. We’re doing it. And I’m sure you’re enjoying this as much as I am,” Karp said when asked at the conclusion of Monday’s earnings call about his message to retail investors in his company.
Chief Critic
Palantir is by far the most expensive stock on the S&P via the commonly cited valuation metric of price-to-sales, which compares a company’s market value to its last 12-month revenues. Palantir’s 70 price-to-sales is more than 20 times the S&P average of 3, even dwarfing the 35 price-to-sales ratio of fellow AI wunderkind Nvidia. “History suggests [this] is nearly impossible to grow into, especially at this scale,” Deutsche Bank analyst Brad Zelnick wrote in a Monday note to clients. Zelnick, who said Palantir’s most recent earnings were “very impressive,” has a sell rating on the stock.
Tangent
Swedish audio streamer Spotify also enjoyed a big post-earnings bounce on Wall Street, as New York-listed shares of Spotify gained more than 10% to a new intraday record of $618.55.
