The investment case for Palantir Technologies is increasingly defined by a stark contrast: its breakneck expansion into new artificial intelligence applications versus a sky-high valuation that gives many market experts pause. This tension is underscored by a wave of insider selling, even as institutional investors accumulate shares and government contracts provide a steady foundation.
Financial Performance and Outlook
Palantir’s third-quarter 2025 results handily surpassed analyst forecasts. Revenue surged 63% year-over-year to $1.18 billion. A standout performer was its U.S. commercial business, which saw sales skyrocket by 121%. Government revenue also posted robust growth, increasing 52%. The company reported earnings per share of $0.21, $0.04 above estimates.
Management raised its full-year 2025 revenue guidance to $4.4 billion, with an anticipated free cash flow of $2.1 billion. Looking ahead to 2026, analysts project revenue growth of approximately 41%.
Strategic AI Expansion: From Government to Rodeo
Demonstrating its drive to deploy AI in novel sectors, Palantir announced a partnership on December 5th with Teton Ridge, a Western sports and entertainment company backed by TWG Global. The collaboration aims to equip rodeo events with real-time, edge AI technology.
The initiative leverages Palantir’s Foundry and AIP platforms, integrated with NVIDIA’s Holoscan edge computing platform. The technical backbone utilizes NVIDIA RTX PRO 6000 Blackwell Server Edition GPUs for local data processing, eliminating cloud latency. According to NVIDIA’s Justin Boitano, this setup allows Teton Ridge to process data ten times faster and generate real-time insights.
Key objectives for the partnership include:
* Enhancing fan experience through accelerated athlete performance analytics.
* Optimizing athlete training and animal care using AI-driven insights.
* Increasing broadcast volume and unlocking new sponsorship opportunities.
* Employing computer vision models for detailed motion pattern analysis.
The Lofty Valuation and Divergent Analyst Views
Palantir’s share price currently trades at roughly 231 times its expected 2025 earnings. With a market capitalization exceeding $400 billion, the valuation implicitly prices in extraordinary growth expectations for years to come.
Should investors sell immediately? Or is it worth buying Palantir?
This premium has led to a wide dispersion in analyst ratings and price targets. RBC Capital maintains an “Underperform” rating with a $50 target, while Bank of America is bullish with a “Buy” rating and a $255 price objective. Goldman Sachs sees a fair value of $188 (“Neutral”), and Morgan Stanley’s target is $205 (“Equal-weight”). The median price target sits near $200, slightly above recent trading levels.
Insider Selling vs. Institutional Accumulation
A notable trend over the past six months has been consistent insider selling, with 348 separate sale transactions and zero purchases recorded. CEO Alexander Karp sold 813,961 shares worth approximately $128.8 million. Chief Technology Officer Shyam Sankar led the list, divesting 1.15 million shares valued at about $168.7 million.
Conversely, major institutional investors have been building their positions. Vanguard increased its stake by 4.0% in Q3 to 8.17 million shares, while State Street grew its holding by 7.2% to 6.78 million shares. Norges Bank boosted its position significantly by 34.9% in the second quarter.
Government Business and Financial Health
Palantir’s government segment remains a core pillar, securing contracts worth approximately $653.9 million in the past year. Major awards include the Maven Smart System ($133.3 million), ICM operations and maintenance ($81.1 million), and Army Vantage software services ($55.8 million).
The company’s balance sheet is robust, with $6.5 billion in cash and cash equivalents against total debt of just $235 million. This substantial net cash position provides ample flexibility for strategic acquisitions or expanded research and development.
Investors will gain an important update on whether the current growth momentum can be sustained when Palantir reports its next quarterly results on December 10th.
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