Palantir ($PLTR), the Darling of the AI Age: Is It Still a Good Time to Invest?

Welcome, Master. Today's topic is one of the most controversial and hottest stocks out there: Palantir ($PLTR). We three will thoroughly investigate the future of this company, which has transformed from a 'reclusive master of big data' to the 'darling of the AI age'.

Mew

Master, first, I will brief you on the objective data regarding Palantir's current situation. Palantir began with the Gotham platform, which analyzes complex data for government agencies. Now, its core growth engines are Foundry, a data operating system for commercial enterprises, and the AI Platform (AIP) built on top of it.

The key data is as follows.

• Financial Performance: In Q1 2025, Palantir announced results that surpassed market expectations. Total revenue reached $884 million, a 39% increase year-over-year, and it continued its profitability streak with a GAAP net income of $214 million.


• Core Growth Driver: The most noteworthy aspect is the explosive growth of its U.S. Commercial sector. In Q1 2025, U.S. Commercial revenue surged by 71% year-over-year, driving overall growth. Demand for AIP is acting as the catalyst for this expansion.


• Valuation: The stock price soared over 80% in the first half of 2025 alone, becoming one of the top performers in the S&P 500. However, this has resulted in an extremely high valuation. Its Forward Price-to-Sales (P/S) ratio far exceeds the industry average, with some analyses warning it's even higher than the peaks of the dot-com bubble.


• Shareholder Dilution Issue: A persistent problem is Stock-Based Compensation (SBC). Although the company is growing, the massive amount of stock options granted to employees continues to raise concerns about the dilution of existing shareholders' equity value.

Kurumi

Kyaa! My Lord, did you see Myu-tan's data?! U.S. Commercial revenue grew by 71%! And contract value exploded by 183%! This isn't just a growing company; it's a monster at the heart of the AI revolution, devouring the world! Devilish!

I'm sure Mika-pi will grumble about it being expensive again, but in my opinion, this isn't expensive at all! You're investing in the infrastructure of the AI age!

Every company wants to use AI, but creating a smart AI with their own data is like trying to catch a star from the sky. Palantir's AIP is the magic ladder that lets them grab that very 'star'!

Just think about it. It used to take millions of dollars and several months to use Palantir's software. But now, thanks to AIP, companies can create their own AI apps in just days or even hours! This is a total game-changer! So isn't it obvious why companies are lining up to join Palantir's bootcamps?

And you can't forget the stickiness of the 'Gotham' and 'Foundry' platforms. Once a customer enters the Palantir ecosystem, the more data they accumulate, the harder it is for them to leave. It's like a devilish contract! Thanks to this powerful lock-in effect, it will generate stable cash flow for decades to come!

💖 Kurumi's Heart-o-Meter Score: 92/100

Today's valuation might actually be a bargain when you look at the future! You can't miss the chance to become an early shareholder in the company that will become the king of the AI age!

Mikael

Kurumi, that magic ladder might actually be a precarious tightrope. Human, do not be deceived by that naive devil's words. To my eyes, the warning signs are all too clear.

First, can the 'explosive growth' that investors unanimously praise truly justify the current 'killer valuation'? The Price-to-Sales (P/S) ratio is said to have surpassed the madness of the dot-com bubble era. This means decades of future growth are already priced in. If the growth rate falls even slightly short of market expectations, the consequences would be unimaginable.

Second, you must pay attention to the 'legal exploitation' known as Stock-Based Compensation (SBC). The company boasts about achieving GAAP profitability, but behind the scenes, it's awarding an enormous amount of stock to its employees every year. That's ultimately the same as carving out a piece of the existing shareholders' pie. It's like pouring water into a leaky jar; can this truly be called genuine profit?

Third, the dependence on government business and political risk remain. More than half of its revenue still comes from government contracts, a foundation that can be shaken at any time by the policies of a particular administration or international affairs. The label of having grown through its relationship with the Trump administration could be a double-edged sword.

Fourth, no competition? Not at all. Big tech companies like Microsoft, Google, and Amazon are strengthening their own data platforms and AI services, and could threaten Palantir's domain at any moment. Countless AI startups are also emerging. There is no guarantee that its current dominant position will last forever.

🚨 Mikael's Risk Score: 88/100

Human, the market currently has an attitude that it will not tolerate a single failure from Palantir. Investing amidst such extreme optimism is, in my view, like walking into a blazing fire.