Palantir (NYSE: PLTR) sees returns as big as its vocabulary, with a fresh lesson on digital metaphysics
Taxonomy. Concatenation. Ontology. Those were just several of the big words thrown around by Palantir Technologies (NYSE: PLTR) executives during its latest earnings call, with that last philosophical term—which has to do with the metaphysics of being itself—playing a central role in how the data analytics company says it’s been able to turn a boom in new commercial, military and government applications for artificial intelligence into record revenue.
“What we’ve delivered to the market is a symbiotic relationship between data, computer, LLMs—organized, powered, made possible, made valuable by something we dared to call an ontology—which was, in the beginning, viewed as a highly obnoxious, anticlimactic term that people thought we were using to obfuscate bad financials.” That’s what CEO Alex Karp told investors this week, describing the company’s platform that serves as a sort of intermediary between corporate or government data and the larger AI models he argues are quickly converging and becoming commoditized.
It’s all the result of a long-term strategy embraced over the past two decades that Chief Revenue Officer Ryan Taylor said is now being turned into products used by one of the biggest pharmacies in the US to help optimize prescription fulfillment and patient outreach, a large telecom company to manage and accelerate the decommissioning of outdated network infrastructure, and a leading global insurance organization to automate underwriting workflows.
“While everyone else is focused on the model supply side, we’re transforming AI into a measurable stream of high-value finished goods and services,” Taylor said, adding that it had all resulted in “the rapid emergence of quantified exceptionalism for organizations able to unlock the potential of these commoditized models.”
Shares surge
While much of the grandiose language used marked a natural evolution from the “dynamism” that was heralded in the previous earnings release, Palantir’s fourth-quarter results statement speaks for itself. The company saw revenue grow 52%, year-over-year, with US commercial sales up 64% and its US government business growing 45%. Its so-called “Rule of 40” score, which measures revenue growth and profit margin, was more than double what’s considered healthy. Shares, meanwhile, surged 24% on Tuesday, bringing gains over the past year to a whopping 521%.
“Our results, the admittedly vulgar metric by which a market often unsure of what it wants to reward attempts to assess value in this world, have now surpassed even our most ambitious expectations,” Karp said. The company provided upbeat guidance, suggesting the strong performance should at least continue into the new year.
There are risks ahead, however, and the threats go beyond simple concerns about possible overvaluation with a forward price-to-earnings ratio that’s nearly ten times that of the overall S&P 500. To start, Palantir is all-in when it comes to AI, and the company has described the current race as a winner-take-all battle that’s only intensified after the DeepSeek model released by a Chinese startup rattled the broader market earlier this month. There’s only room for one winner as the company sees it, and that doesn’t leave any room for error.
‘This is a revolution’
Palantir—long known for its close links to the US government—is also unabashedly “America-first,” and while that largely falls in line with policies being embraced by the new administration of President Donald Trump, it could leave the company exposed if the global tides ever turn. Karp, for his part, sees opportunity in the disruptive tendencies currently engulfing the country’s politics, and he’s been outspoken about that view from the very start.
“We love disruption, and whatever is good for America will be good for Americans and very good for Palantir,” he said. “Disruption at the end of the day exposes things that aren’t working. There will be ups and downs. This is a revolution. Some people are going to get their heads cut off. We’re expecting to see really unexpected things, and to win. Basically, that’s what we’re going to do.”
Palantir may be waxing poetic about digital metaphysics—with its platforms imposing structure on raw data much like Aristotle sought to define the fundamental categories of existence and impose order on the natural world—but behind the philosophical rhetoric lies an emerging view that the real winners in the AI arms race underway may not be chipmakers like Nvidia (NASDAQ: NVDA) or the model producers like OpenAI and Google (NASDAQ: GOOGL). Instead, it’s the firms that master AI integration into real-world business and military use cases that could jump to the head of the pack.
