In a market full of stocks that are wildly expensive by historical standards, Palantir is a standout.
The Denver-based data analytics company is the 18th most valuable stock in America, eclipsing oil giants and most big banks. Its share price -- when compared with its sales -- far exceeds Microsoft, Alphabet, Amazon and Oracle. It blows away defense contractors.
Palantir Chief Executive Alex Karp has consistently punched back against anyone who questions its ascendance, arguing analysts don't know how to assess a company like his. "I would tell you I don't know nor does anyone else know what Palantir is actually worth," Karp said in an interview.
No other company currently in the S&P 500 hit a $490 billion valuation as quickly and with as little in sales as Palantir did on Monday, according to a Wall Street Journal analysis of inflation-adjusted FactSet market data going back to 1984.
More than 20 other companies have reached that mark, but none other than Meta did it faster -- averaging more than two decades. All had far more revenue at that point than Palantir, which notched less than $4 billion in sales in the past four quarters. Meta surpassed it in 2016 with some $37 billion in inflation-adjusted revenue after going public four years earlier. Tesla cleared that benchmark in 2020 after 10 years as a publicly-traded company and it took Oracle nearly four decades.
"It's the most expensive company I have ever seen in my life," Adam Parker, founder of stock research firm Trivariate Research, said of Palantir. In a note to clients, he advised shorting the stock "unless you are confident that it will grow faster and longer than any company has grown ever."
This week, "Big Short" investor Michael Burry disclosed a large bet against the stock. Shares fell 8% Tuesday despite an earnings report that exceeded forecasts.
The transformation
Founded in 2003, Palantir spent years as a Silicon Valley outsider, doing secretive government work on counterterrorism while consumer tech boomed. In the past half decade, it has emerged from the fringes as a power player. The Pentagon uses Palantir software to detect drone attacks. ICE uses it to track immigrants. Hospitals use it to manage patient care.
Trump bump
Since President Trump returned to office, Palantir has landed new government contracts worth up to $1.6 billion, according to federal contracting data. The Air Force awarded $460 million in contracts. State and Veterans Affairs added another $400 million each.
In September, Palantir won another $100 million from the Internal Revenue Service, which came after $30 million for an app that helps Immigration and Customs Enforcement find immigrants and track their deportation. The ICE contract sparked backlash and senior staff departures. By the next month, the stock price was up by more than a third.
Last month, Karp and a fellow Palantir executive joined Trump in the Oval Office for a national security discussion. In June, Chief Technology Officer Shyam Sankar enlisted in the Army reserves. The company donated to Trump's $250 million ballroom, earning leadership a seat at a recent White House dinner.
Retail darling
As its political profile grew, so did Palantir's cultural cachet -- as a symbol of the AI revolution, tech patriotism and contrarian triumph.
Its fan base has buoyed the stock price. Podcasters and YouTube personalities with direct access to Palantir executives use their platforms to clap back at critics. Through September, it was the fifth most-bought stock among retail traders.
Loyalists treat it like a lifestyle brand, despite Palantir having no consumer products. An online merch store sells athletic shorts and T-shirts with Karp's face. The company's "Meritocracy Fellowship" encourages teenagers to skip college in favor of working for Palantir. More than 500 applied earlier this year.
Karp seems to revel in his company's unconventional ascent, and taunts the analysts who question it. "They've been wrong consistently," he said. "They were wrong on Amazon for almost a decade. They were wrong on Tesla almost all the way through."
The company is now valued at more than Boeing. Its CEO gets called to the Oval Office. The math may not add up, but that hasn't stopped the stock from climbing.
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