The artificial intelligence sector is experiencing a powerful resurgence, and Palantir Technologies finds itself once again at the forefront of this upward movement. Following a brief consolidation period, the data analytics company’s stock has catapulted higher, rekindling investor enthusiasm. The central question for market participants is whether this specialist can maintain its extraordinary ascent.
Record-Breaking Quarterly Performance
The foundation for this renewed optimism was laid on November 3rd with the release of exceptional quarterly earnings, representing Palantir’s strongest financial performance in its more than two-decade history. Revenue surged by 63% to reach $1.18 billion, significantly surpassing analyst projections of $1.09 billion.
A particularly impressive highlight was the performance of its U.S. commercial business, which expanded by 121% to $397 million. In his shareholder letter, Chief Executive Officer Alex Karp emphasized, “Our business generated $1.2 billion in revenue in the third quarter—an accelerating and otherworldly growth rate of 63%.”
Market Recovery Fuels Advance
The recent share price advance is part of a broader market recovery that has particularly benefited AI-focused equities. After the technology sector declined by 4.2% the previous week, market sentiment shifted dramatically on Monday.
Ross Mayfield, an investment strategy analyst at Baird, commented on the shift: “This is a recovery from the slight oversold conditions of last week. We are seeing the ‘buy-the-dip’ mentality re-emerge within the AI and technology sector.” Palantir’s notable 8.8% climb was accompanied by substantial gains across the AI ecosystem, with NVIDIA advancing 5.8% and Tesla adding 3.7%. This collective movement underscores the persistent investor fascination with artificial intelligence, despite intermittent pullbacks.
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Divergent Analyst Perspectives on Valuation
Despite the company’s operational strength, financial experts remain divided in their assessment of Palantir’s valuation. The equity currently trades at approximately 120 times revenue—a significant premium compared to other artificial intelligence companies.
Mark Giarelli, an analyst at Morningstar, raised his fair value estimate for the stock to $135 but offered a note of caution: “We believe Palantir offers the best software for operationalized AI, but chasing momentum here is risky. The current pricing leaves no room for error.” In contrast, following the third-quarter results, institutions including Bank of America and Piper Sandler have expressed bullish outlooks, acknowledging Palantir’s formidable positioning within the AI market.
AI Platform Drives Expansion
The company’s continued momentum is being propelled by the accelerated adoption of its Artificial Intelligence Platform (AIP) among commercial clients. During the third quarter, Palantir secured 204 contracts valued at a minimum of $1 million each. This total included 91 deals exceeding $5 million and another 53 transactions worth over $10 million.
Management has subsequently raised its full-year revenue guidance, anticipating continued expansion across both its commercial and government segments. Strategic collaborations, including partnerships with industry leaders like NVIDIA, position Palantir advantageously to capitalize on the ongoing AI transformation sweeping multiple industries.
With an impressive year-to-date gain of approximately 155%, Palantir continues to rank among the technology sector’s most outstanding performers. The critical challenge for investors remains determining whether this AI-driven ascent can justify its current valuation heights.
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