Palantir Technologies: The Data-Driven Powerhouse Shaping American Technological Dominance

Palantir: the world according to Karp

We're not in John Irving's book or in Saruman's great tower, not far from Mordor, but in Denver, Colorado, where Palantir set up its headquarters just over 4 years ago. Behind its name, borrowed from the omniscient artifacts of The Lord of the Rings, Palantir Technologies embodies a strategic vision in which data is king, information a weapon, and speed a necessity. The company doesn't just develop data analysis software: it shapes a technological approach that embraces American power, both economically and geopolitically. Peter Thiel and Alexander Karp - Chairman and CEO respectively - are the two acolytes behind this strange company, now capitalized at over $250 billion on the US stock exchange. Palantir thrives in times of crisis, from the 9/11 attacks to the COVID-19 pandemic, via the digital transformation of companies. Its strength? A resolutely pragmatic approach that stands in stark contrast to bureaucratic red tape, an approach that Palantir's management extols in its communications. Where traditional markets are struggling to adapt, Palantir is imposing its disruptive model, challenging costly IT infrastructures with the promise of higher-performance, more profitable solutions. Palantir is more than just a software vendor: it's a pillar of U.S. intelligence and defense. Its technologies, adopted by the Pentagon and the CIA, offer a decisive advantage in the field, enabling ultra-rapid decision-making. CEO Alexander Karp makes no secret of the company's commitment to Western values and American supremacy in the face of emerging threats. He concludes his February 2025 letter to shareholders with these weighty words: "When it comes to promoting the interests of an institution, of a nation, complacency and the abandonment of all humility are the enemy of progress. This feeling of completeness, often only temporary, the certainty of the end of history, like condescension towards a defeated adversary or competitor, can be fatal. A company's technical complacency is often a reflection of its political choices and instincts. Our commitment to tolerance and transparency - our values as a culture - is undoubtedly irrepressible and exhilarating. But we can't expect them alone to prevail, and protect us". Beyond algorithms, Palantir is developing a veritable data ontology, structuring information to extract operational intelligence. The term "ontology" is undoubtedly the one that management puts forward the most when it comes to explaining how AI powered by Palantir is ahead of other forms of deployment. This culture of performance and innovation is expressed in its selective recruitment and its ability to break down institutional resistance through the power of its results. Here again, promises are only binding on those who listen, but Palantir has succeeded in winning major contracts and retaining major customers. In the face of China's technological expansion, Palantir adopts a posture of defiance. Its tools are designed to counter cyberthreats and preserve the informational sovereignty of the United States and its allies. In this information war, Palantir is both shield and sword. Shyam Sankar, the group's CTO, has no hesitation in asserting that the United States is engaged in an AI arms race with China, because this is a war, a real war. Despite strong growth potential, Palantir is coming up against regulatory complexity and an institutional distrust of American companies in Europe. Yet the effectiveness of its cybersecurity and crisis management solutions could make it a key partner... provided that cultural and administrative obstacles are overcome. Palantir is much more than a name: it's the symbol of an informational domination where speed, power and pragmatism dictate the law. Without any angelism. They truly define themselves as a defense company, often comparing themselves to the likes of RTX, Lockheed Martin, Boeing, General Dynamics, Northrop Grumman, L3Harris and Huntington Ingalls Industries. Source : Palantir Palantir has since expanded into civilian applications. They compete with numerous software companies such as SAP, Alteryx, Databricks, Anduril and Snowflake. Whenever I ask an investor-passionate about Palantir what the company does, he often finds himself explaining how the company is "great" without really understanding what it offers. I dove into the heart of the machine to finally solve this mystery. What does Palantir really do? The American company offers a software suite: Gotham, Foundry, Apollo and AIP. Palantir has announced impressive results for the fourth quarter of 2024, underpinned in particular by the commercial part, which posted year-on-year growth rates of 64% in the USA reaching $214 million, against growth of 45% for US government revenues. Overall sales were up 36%, driven by the United States at 52% YoY growth, with 67% of sales generated in the United States. International growth was slower, particularly in Europe. Source : Palantir Palantir is developing its contracts with existing partners, with a high retention rate (120% in Q4 2024), but above all is expanding its customer base, which has risen by 43% year-on-year from 497 to 711 (including 571 business customers). The Rule of 40 (sum of adjusted operating margin and sales growth) has clearly been blown up, and has only increased from quarter to quarter over the past two years, rising from 42% in Q1 2023 to 81% in Q4 2024. Over the full year 2024, the company paid out $281.7 million in SBC (Stock-Based Compensation) to employees, representing 60% of cash flow from operating activities and 24% of sales. Palantir has always been generous in this area, in order to retain its top performers, which has enabled it to widen the gap with the competition. A blessing in disguise, but we would welcome a return to "normal" conditions in the long term, i.e. SBC below 5% of operating cash flow. For 2025, the company forecasts sales of between $3.741 and $3.757 billion, and SBC-adjusted FCF of between $1.5 and $1.7 billion. Palantir's valuation is the subject of much debate. Personally, I'd steer clear of the very popular retail stocks that trade at stratospheric multiples. We're talking about 360 times its estimated earnings for 2025 and 65 times its enterprise value on sales, making it the most expensive company on the stock market to my knowledge. By comparison, Nvidia appears to be a value company, as the gap is so wide. It has to be said that the story on which Palantir is riding is magnificently well put together. The leader in data analysis is widening the gap with competitors such as Alteryx, Databricks, Anduril, Snowflake, Tableau Software, Tyler Technologies, Verint and Splunk, in a market that is still in its infancy, gigantic and in the making. The road ahead seems clear, with linear growth estimated at "high double digit" over the next decade, and customers lining up in droves at the door. Financial health is a veritable fortress, with over $5.2 billion in cash on the balance sheet and no debt. Margins and cash conversion are among the best in the sector (83% gross margin, 45% operating margin and 63% adjusted FCF margin). With fundamentals like these, Palantir deserves the top spot, but 152 times its EV/EBITDA for 2025 is too expensive in my opinion. The ideal scenario is built into the price. Even if Palantir has the characteristics of the next Magnificent Seven, I think it's unreasonable to enter the stock now after the wave of hype we've just seen. Sooner or later, Palantir will make a mistake, and at these price levels, volatility is unforgiving. There will certainly be better entry points for the stock in the coming quarters and/or years, at a lower risk.

Palantir Technologies Inc. : Palantir

We're not in John Irving's book or in Saruman's great tower, not far from Mordor, but in Denver, Colorado, where Palantir set up its headquarters just over 4 years ago. Behind its name, borrowed from the omniscient artifacts of The Lord of the Rings, Palantir Technologies embodies a strategic vision in which data is king, information a weapon, and speed a necessity. The company doesn't just develop data analysis software: it shapes a technological approach that embraces American power, both economically and geopolitically. Peter Thiel and Alexander Karp - Chairman and CEO respectively - are the two acolytes behind this strange company, now capitalized at over $250 billion on the US stock exchange. Palantir thrives in times of crisis, from the 9/11 attacks to the COVID-19 pandemic, via the digital transformation of companies. Its strength? A resolutely pragmatic approach that stands in stark contrast to bureaucratic red tape, an approach that Palantir's management extols in its communications. Where traditional markets are struggling to adapt, Palantir is imposing its disruptive model, challenging costly IT infrastructures with the promise of higher-performance, more profitable solutions. Palantir is more than just a software vendor: it's a pillar of U.S. intelligence and defense. Its technologies, adopted by the Pentagon and the CIA, offer a decisive advantage in the field, enabling ultra-rapid decision-making. CEO Alexander Karp makes no secret of the company's commitment to Western values and American supremacy in the face of emerging threats. He concludes his February 2025 letter to shareholders with these weighty words: "When it comes to promoting the interests of an institution, of a nation, complacency and the abandonment of all humility are the enemy of progress. This feeling of completeness, often only temporary, the certainty of the end of history, like condescension towards a defeated adversary or competitor, can be fatal. A company's technical complacency is often a reflection of its political choices and instincts. Our commitment to tolerance and transparency - our values as a culture - is undoubtedly irrepressible and exhilarating. But we can't expect them alone to prevail, and protect us". Beyond algorithms, Palantir is developing a veritable data ontology, structuring information to extract operational intelligence. The term "ontology" is undoubtedly the one that management puts forward the most when it comes to explaining how AI powered by Palantir is ahead of other forms of deployment. This culture of performance and innovation is expressed in its selective recruitment and its ability to break down institutional resistance through the power of its results. Here again, promises are only binding on those who listen, but Palantir has succeeded in winning major contracts and retaining major customers. In the face of China's technological expansion, Palantir adopts a posture of defiance. Its tools are designed to counter cyberthreats and preserve the informational sovereignty of the United States and its allies. In this information war, Palantir is both shield and sword. Shyam Sankar, the group's CTO, has no hesitation in asserting that the United States is engaged in an AI arms race with China, because this is a war, a real war. Despite strong growth potential, Palantir is coming up against regulatory complexity and an institutional distrust of American companies in Europe. Yet the effectiveness of its cybersecurity and crisis management solutions could make it a key partner... provided that cultural and administrative obstacles are overcome. Palantir is much more than a name: it's the symbol of an informational domination where speed, power and pragmatism dictate the law. Without any angelism. They truly define themselves as a defense company, often comparing themselves to the likes of RTX, Lockheed Martin, Boeing, General Dynamics, Northrop Grumman, L3Harris and Huntington Ingalls Industries. Source : Palantir Palantir has since expanded into civilian applications. They compete with numerous software companies such as SAP, Alteryx, Databricks, Anduril and Snowflake. Whenever I ask an investor-passionate about Palantir what the company does, he often finds himself explaining how the company is "great" without really understanding what it offers. I dove into the heart of the machine to finally solve this mystery. What does Palantir really do? The American company offers a software suite: Gotham, Foundry, Apollo and AIP. Palantir has announced impressive results for the fourth quarter of 2024, underpinned in particular by the commercial part, which posted year-on-year growth rates of 64% in the USA reaching $214 million, against growth of 45% for US government revenues. Overall sales were up 36%, driven by the United States at 52% YoY growth, with 67% of sales generated in the United States. International growth was slower, particularly in Europe. Source : Palantir Palantir is developing its contracts with existing partners, with a high retention rate (120% in Q4 2024), but above all is expanding its customer base, which has risen by 43% year-on-year from 497 to 711 (including 571 business customers). The Rule of 40 (sum of adjusted operating margin and sales growth) has clearly been blown up, and has only increased from quarter to quarter over the past two years, rising from 42% in Q1 2023 to 81% in Q4 2024. Over the full year 2024, the company paid out $281.7 million in SBC (Stock-Based Compensation) to employees, representing 60% of cash flow from operating activities and 24% of sales. Palantir has always been generous in this area, in order to retain its top performers, which has enabled it to widen the gap with the competition. A blessing in disguise, but we would welcome a return to "normal" conditions in the long term, i.e. SBC below 5% of operating cash flow. For 2025, the company forecasts sales of between $3.741 and $3.757 billion, and SBC-adjusted FCF of between $1.5 and $1.7 billion. Palantir's valuation is the subject of much debate. Personally, I'd steer clear of the very popular retail stocks that trade at stratospheric multiples. We're talking about 360 times its estimated earnings for 2025 and 65 times its enterprise value on sales, making it the most expensive company on the stock market to my knowledge. By comparison, Nvidia appears to be a value company, as the gap is so wide. It has to be said that the story on which Palantir is riding is magnificently well put together. The leader in data analysis is widening the gap with competitors such as Alteryx, Databricks, Anduril, Snowflake, Tableau Software, Tyler Technologies, Verint and Splunk, in a market that is still in its infancy, gigantic and in the making. The road ahead seems clear, with linear growth estimated at "high double digit" over the next decade, and customers lining up in droves at the door. Financial health is a veritable fortress, with over $5.2 billion in cash on the balance sheet and no debt. Margins and cash conversion are among the best in the sector (83% gross margin, 45% operating margin and 63% adjusted FCF margin). With fundamentals like these, Palantir deserves the top spot, but 152 times its EV/EBITDA for 2025 is too expensive in my opinion. The ideal scenario is built into the price. Even if Palantir has the characteristics of the next Magnificent Seven, I think it's unreasonable to enter the stock now after the wave of hype we've just seen. Sooner or later, Palantir will make a mistake, and at these price levels, volatility is unforgiving. There will certainly be better entry points for the stock in the coming quarters and/or years, at a lower risk.