With shares trading up by almost 172% over the last 12 months, Palantir Technologies (NASDAQ: PLTR) was one of 2025’s biggest winners in the generative artificial intelligence (AI) software space. While the company’s unique brand of technology-led patriotism has attracted its fair share of criticism and controversy, it has also earned Palantir a cult following, which has likely contributed to its explosive near-term growth.
Let’s dig deeper to find out if the rally can continue in 2026 and beyond.
While Palantir Technologies only recently became a household name in investing circles, the company is not new. Since its founding in 2003, Palantir has provided big data analytics services to high-profile clients like the U.S. Department of Defense and the CIA. It is even believed to have helped track down Osama bin Laden during the war on terror and assisted the first Trump administration with undocumented migrant interdiction and deportation.
At their core, Palantir’s software-as-a-service (SaaS) offerings are designed to comb through vast amounts of data to identify trends and patterns that can help guide an organization’s decision-making. Generative AI made this process faster and more accessible for users, enabling operators to access insights in real time with simple prompts.
Palantir launched its Artificial Intelligence Platform (AIP) on April 7, 2023. The fact that shares have rocketed by over 2,000% since that date suggests the market believes the new generative AI functionality will be a game-changer for the company. There have already been significant impacts.
Palantir’s third-quarter earnings were impressive. Revenue jumped 77% year over year to $883 million. But perhaps surprisingly, this was driven mainly by U.S. commercial clients instead of the government contracting that the company is typically known for. The U.S. commercial business surged by 121% year over year to $397 million, or 44% of the total, and it is on track to represent the majority of Palantir’s top line by the next few quarters.
Palantir’s increasing reliance on commercial clients is driving substantial growth. Still, the trend might be a cause for concern because it makes the company much more vulnerable to competition from other tech giants.
Historically, Palantir’s economic moat came from its close relationship with the government. After all, it was partially funded by the CIA’s venture capital arm, In-Q-Tel, and it has a track record of handling sensitive classified information. A substantial portion of its workforce likely has security clearances. And it has proven to be resistant to internal employee pressure related to controversial military-related contracts, such as the U.S. Army’s Maven Smart System deal previously abandoned by Alphabet‘s Google.
