Palantir Technologies (NASDAQ: PLTR), the data mining and analytics firm named after the all-seeing orbs from The Lord of the Rings, went public via a public listing just over five years ago. It opened at US$10 on the first day, but it now trades at around US$180.
Palantir dazzled the bulls with its accelerating revenue growth and soaring profits, but could it head even higher over the next five years? Let’s review its catalysts and challenges to find out.
What happened to Palantir over the past five years?
Palantir aggregates data from disparate sources like emails, databases, spreadsheets, and sensors. It cleans up all that information, analyzes it to spot trends, and organizes its findings on visual dashboards. It provides those services through two main platforms: Gotham for its government customers, and Foundry for its commercial customers.
Most U.S. government agencies already use Gotham. The military uses it to plan missions, and law enforcement agencies use it to track criminal investigations. Its uses are broad but divisive: It was reportedly used to find Osama Bin Laden in 2011, but it’s also being used by Immigration and Customs Enforcement (ICE) as a tracking tool.
Walmart, Amazon, and Apple use Foundry to optimize their supply chains, detect fraud, and analyze customer behavior. In the first half of 2025, Palantir generated 55% of its revenue from Gotham and the remaining 45% from Foundry. Here’s how those two core businesses fared over the past five years.
|
Metric |
2020 |
2021 |
2022 |
2023 |
2024 |
1H 2025 |
|---|---|---|---|---|---|---|
|
Government revenue growth (YOY) |
77% |
47% |
19% |
14% |
28% |
47% |
|
Commercial revenue growth (YOY) |
22% |
34% |
29% |
20% |
29% |
40% |
|
Total revenue growth (YOY) |
47% |
41% |
24% |
17% |
29% |
44% |
Data source: Palantir. YOY = year over year. 1H = first half.
Palantir got off to a great start, but its growth cooled off in 2022 and 2023 as it grappled with the uneven timing of its government contracts and macro headwinds for its commercial customers. That deceleration forced it to abandon its original goal for growing its annual revenue by at least 30% through 2025.
But over the past year and a half, its revenue growth accelerated again. Escalating geopolitical conflicts drove more government agencies to award Gotham with fresh defense contracts. Meanwhile, stabilizing inflation, declining interest rates, and a rush toward AI upgrades also prompted more companies — especially in the U.S. — to ramp up their spending on Foundry’s services. It also rolled out more AI applications to support the development of customized AI services.
Palantir turned profitable on a generally accepted accounting principles (GAAP) basis in 2023, and its net income more than doubled year over year in both 2024 and the first six months of 2025. Those soaring profits — which can be largely attributed to its improving scale, its resilient pricing power, and a significant reduction in its stock-based compensation expenses — led to its inclusion in the S&P 500 and Nasdaq-100 last year.
What will happen to Palantir over the next five years?
From 2024 to 2027, analysts expect Palantir’s revenue and GAAP earnings per share (EPS) to grow at a compound annual growth rate (CAGR) of 38% and 63%, respectively. Its biggest potential catalysts include a new US$10 billion contract with the U.S. Department of Defense, its plans to build a “Golden Dome” missile defense system for the U.S. through partnerships with Anduril Industries and Microsoft, its ongoing expansion into Europe, and the robust growth of its U.S. commercial business.
But at US$178 per share with a market cap of US$444 billion, Palantir stock trades at 323 times next year’s earnings and 79 times next year’s sales. Those meme stock valuations could cap its upside potential and set it up for a steep drop in the next market downturn.
Let’s assume Palantir matches analysts’ estimates through 2027 and grows its EPS at an impressive CAGR of 30% from US$0.83 in 2027 to US$2.37 in 2031. If it’s trading at a more reasonable (but still generous) 50 times forward earnings by the beginning of 2031, its stock price would actually decline about 34% to US$118 over the next five years.
So while Palantir’s business is still firing on all cylinders, investors shouldn’t pay the wrong price for the right company. If you want to hold Palantir’s stock for at least the next five years, it’d be smarter to wait for its current bubble to pop and accumulate its shares at a much lower price.
