When Palantir hit the stock market in September 2020, there was a lot that could go wrong. The Covid pandemic was sweeping across the globe, society was in lockdown and markets were volatile.

Meanwhile, Palantir was operating at a loss while dealing with ongoing criticism over its government work, in particular with U.S. Customs and Immigration. And the company was going public through a direct listing rather than a traditional IPO.

At its opening price of $10 per share, Palantir was valued at $16.5 billion, down from its private market peak of $20.4 billion in 2015.

“It was the beginning of the pandemic, no one knew what was happening,” CFO David Glazer said in an interview. “The stock market wasn’t ripping, everyone wasn’t trying to go public, and we decided to go public as quickly as possible.”

Exactly five years later, Palantir has reached heights that would’ve been hard for even the biggest bulls to fathom.

The stock price has surged more than 1,700%, closing on Tuesday at $182.42 for a market cap of over $432 billion. That puts it among the 20 most-valuable U.S. companies, and above tech stalwarts like Cisco and IBM. Last year, Palantir joined the S&P 500, replacing American Airlines.

Quarterly revenue surpassed $1 billion for the first time last quarter, and is expected to reach $4.2 billion this year, according to analysts surveyed by LSEG, up almost sixfold from 2019. The company’s roster of customers grew from 125 in the first half of 2020 to 849 at the end of June. During that time, Palantir has added 1,500 full-time employees.

CEO Alex Karp, who founded the company in 2003 alongside notable investors like Peter Thiel and Joe Lonsdale, was exerting optimism on day one of Palantir’s life on the public market.

“We’ve reached a base where our company is very significant,” Karp, who holds a law degree from Stanford and PhD in neoclassical social theory from Goethe University in Frankfurt, Germany, told CNBC in an interview on listing day. “Being in the public space will help us with our clients and help us grow.”

Its dizzying ascent since then has perplexed Wall Street, which is unfamiliar with these kinds of multiples, especially for companies of this size.

Palantir trades for 226 times earnings over the next 12 months, with a forward revenue multiple of over 80. Those numbers dwarf even the multiples on Tesla, which trades for 194 times forward earnings and 14 times revenue over the next year.

In a report last month, Citron Research’s Andrew Left, a noted short-seller, called Palantir “detached from fundamentals and analysis.” When compared to OpenAI’s recent $500 billion valuation, he said Palantir should be priced at $40, or less than one-quarter of its current price, if it was assessed the same revenue multiple as the artificial intelligence startup.

“Karp and his team should be proud. But for investors, that’s where discipline kicks in,” Left wrote. “Comparison is the enemy of happiness, and when measured against true AI leaders, Palantir’s price already reflects success beyond its fundamentals.”

Karp, who doesn’t shy away from a dispute, recently told detractors to “exit” if they “don’t like the price.”

“We are going to be the most important software company in the world, and people will figure out what that’s valued over a long period of time,” Karp said on the day of the company’s NYSE debut.

Palantir declined to make Karp available for an interview.

Valuation isn’t the only source of controversy. Critics have also raised concerns about how Palantir’s tools are being used by the likes of ICE and other government agencies.

Palantir was founded as a response to national security threats in the wake of 9/11. The company developed hefty software that it helped customize for clients to enable them to compile and analyze large data sets. On its website, Palantir says that it’s partnered with the U.S. Army since 2008, “embedding alongside users to design and deploy modern mission essential software solutions.”

Federal documents from April show that ICE paid Palantir $30 million to provide “real-time visibility” on people self-deporting. Earlier this year, the New York Times reported that Palantir is helping the Trump administration gather data on Americans.

In a blog post, Palantir called the reporting “reckless and irresponsible.” Karp said in a June interview with CNBC that Palantir was “not surveilling Americans.”

The company has also faced backlash for providing technology to the Ukrainian and Israeli militaries.

Karp told CNBC in March 2024 that employees had left the company due to his public support of Israel, and that he expected more to leave. Palantir took out a full-page ad in The New York Times following the deadly Oct. 7 attack by Hamas the prior year that said the company “stands with Israel.”

“From my perspective, it’s not just about Israel,” Karp said in the CNBC interview. “It’s like, ‘Do you believe in the West? Do you believe the West has created a superior way of living?'”

Over the last five years, Palantir has scooped up big government deals against contractors like RTX and partnered with aerospace giants such as L3Harris and Boeing. Over the summer, the company landed a software and data contract with the Army worth up to $10 billion.

Karp has long been an unapologetic defender of Palantir’s business pursuits.

Originally headquartered in Palo Alto, California, Karp moved the company to Denver in 2020 as he grew increasingly disgruntled with what he viewed as Silicon Valley’s monoculture.

In a letter to investors ahead of its direct listing, Karp said, “the engineering elite” of Silicon Valley do not know “how society should be organized or what justice requires” and that the company shares “fewer and fewer of the technology sector’s values and commitments.”

While Palantir has been a standout performer on the market over the past five years, long-term investors had to weather some dark days along the way.

By the end of 2020, Palantir’s stock had jumped to $23.55, a gain of almost 136%. In Karp’s letter ahead of the direct listing, he asserted that “effective software can be essential to an organization’s survival” during times of crisis.

Skepticism started building in the second half of 2021. Early the following year, rising interest rates and soaring inflation pushed investors out of risky securities and into safer assets like bonds. Palantir shares lost two-thirds of their value in 2022, closing the year at $6.42, well below the direct listing price.

But November of that year brought with it the introduction of ChatGPT and a new era of AI that revived and redefined the tech industry.

Palantir launched its AI platform called AIP in April 2023. It was designed to help securely integrate large language models when dealing with sensitive data, making it much faster and more efficient for Palantir’s technology to pull in and analyze information.

The company has attributed much of its expansion in the commercial market to AIP. Government business still accounts for most of its revenue, but Palantir has attracted corporate clients such as Wendy’s and American Airlines.

Glazer said on the latest earnings call in August that the total contract value of bookings in the quarter soared 185% to $1.1 billion, with U.S. commercial revenue jumping 93% from a year earlier.

“AIP continues to drive existing customer expansion and new customer conversions in the U.S.,” Glazer said.

One customer the company cited was auto supplier Lear and a recent five-year partnership between the two. Palantir said that Lear uses AIP for help with “proactively managing their tariff exposure, automating multiple administrative workflows, and dynamically balancing their manufacturing lines.”

Palantir’s stock soared 341% last year and is up another 141% so far in 2025.

The AI is getting a lot of use in government, too.

In 2024, Palantir landed a contract to create AI-powered mobile ground stations able to collect data for soldiers using space sensors. In May of this year, the Pentagon lifted the company’s total ceiling for its Maven Smart Systems contract for AI capabilities to $1.3 billion.

Akash Jain, Palantir’s technology chief and president of its U.S. government business, said in an interview that AI has created a whole new set of risks, forcing the government to rethink how it uses commercial technologies.

 “We’re perfectly positioned for the growth,” he said.

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