The artificial intelligence revolution is running full steam ahead. Nearly three years after OpenAI’s ChatGPT shocked the world by becoming the fastest app to reach 1 million users, almost every business in every industry is knee-deep in crunching, training and running AI apps.
The R&D pace is feverish and the dollars spent on AI projects are eye-popping, totaling hundreds of billions annually. Unsurprisingly, companies like Palantir, which are front-and-center in helping AI become reality, are seeing sales, profit and stock prices surge.
Palantir’s platforms at a glance:
- Foundry: Allows enterprises to mine and exploit data securely.
- Gotham: Provides mission-critical data insights to the government.
- Artificial Intelligence Platform (AIP): Turnkey AI solutions for Foundry and Gotham customers.
Palantir’s ability to safely and securely mine data across siloes has positioned it as one of AI’s biggest winners. The potential associated with it developing increasingly more helpful AI solutions isn’t lost on Bank of America, given that it recently rebooted its Palantir stock outlook on the agentic AI opportunity.
Artificial intelligence becomes reality
AI may seem like a new concept, but it’s far from it. Research has been underway since the 1950s, when the mathematician and computer scientist Alan Turing contemplated AI computers, and Rand Corp. created the first AI program in 1956.
Countless science fiction books and movies, from Isaac Asimov’s “iRobot” to the director James Cameron’s “The Terminator” and beyond, have entertained the possibility that machines could think for themselves someday.
However, it wasn’t until ChatGPT’s launch that AI became mainstream.
Related: Salesforce CEO sends message on Palantir after $950M deal
The ability to quickly parse data for insight and create content turned ChatGPT into one of the most sought-after apps in history, unleashing a torrent of R&D from rivals like Alphabet’s Google, which quickly realized that AI could substantially disrupt just about everything.
Manufacturers are evaluating AI’s benefits in quality control. Retailers are exploring how to use it to better manage inventory. Banks are using it to hedge risks. Health-care companies are assessing whether it can improve patient outcomes. Even the military is considering how AI could transform the battlefield.
As a result, IT budgets are being repositioned toward AI, which has been a boon for Palantir. The Denver company, which cut its teeth in the early 2000s as the go-to data solution for the Defense Department, has quickly become a go-to solution for Fortune 500 companies.
Hyperscaler capital expenditures in Q2:
- Meta Platforms: $17.01 billion
- Alphabet: $22.4 billion
- Microsoft: $24.2 billion ($17.1 billion excluding finance leases)
- Amazon: $31.4 billion
Source: Meta, Alphabet, Microsoft, Amazon’s SEC filings and Q2 earnings conference calls.
Agentic AI might change work as we know it
A three-day workweek? It’s not nearly as unfathomable as it might seem. Influential capitalists, including JP Morgan’s Jamie Dimon and Zoom’s Eric Yuan, say it’s more likely than not.
One big reason? Agentic AI. As AI programs get smarter, their ability to take on basic tasks could be the biggest advance in productivity since the dawn of the internet or the Industrial Revolution.
More Palantir:
- Salesforce CEO sends message on Palantir after $950M deal
- Bank of America revamps Palantir stock outlook after AIPCon
- This stock displaced Palantir as top-performing S&P 500 stock
Of course, getting to the point where AI agents can do much of the heavy lifting won’t be simple, as many companies are quickly discovering.
AI requires incredible computing power that is simply not found in legacy enterprise networks, forcing companies to turn to cloud infrastructure providers with scale (and very deep pockets), like Amazon Web Services or Microsoft’s Azure for superfast data crunching.
Even then, however, the process isn’t cut and dried. Creating the code necessary to cut across data parked in disparate systems, training and running AI is complicated and costly, making turnkey solutions like those Palantir offers increasingly compelling.
Palantir fills the agentic-AI void
Palantir has done the heavy lifting, creating AI-development solutions via its AIP that can be deployed quickly for clients with data on its Gotham and Foundry platforms.
Rather than building AIP systems in-house, companies are increasingly discovering that it makes more sense to outsource to Palantir, turning it into one of AI’s biggest winners.
“AIP isn’t just software our customers use; it’s software our customers are building their software on,” said Shyam Sankar, PLTR’s executive vice president and chief technology officer, on Palantir’s second-quarter earnings conference call.
Over the past three years, Palantir’s client base has swelled, causing sales and profit to surge.
Palantir facts at a glance:
- 2025 Revenue (est): $4.2 billion, up 121% since 2022
- Earnings per share (est): $0.64, compared with a loss of $0.18 in 2022
- U.S. commercial customers: 485, up 64% year-over-year
Revenue by year:
- 2025 (est): $4.2 billion
- 2024: $2.9 billion
- 2023: $2.2 billion
- 2022: $1.9 billion
- 2021: $1.5 billion
Source: Palantir SEC filings
The momentum isn’t slowing. Roughly 55% of Palantir’s sales last quarter came from governments, and demand from them remains strong. For instance, the company just inked a nearly $1 billion deal to help the U.K. government develop AI defense solutions.
Corporate demand is also growing, with new accounts quarterly and growing penetration at existing accounts. The average spent by Palantir’s top 20 clients over the past 12 months totaled $75 million, up 30% from one year earlier.
“Our U.S. commercial business grew 93% year-over-year and 20% sequentially and our U.S. government business grew 53% year-over-year and 14% sequentially,” said Palantir Chief Financial Officer David Glazer on the call.
On Sept. 23 Boeing said it was the latest company to turn to Palantir’s expertise, disclosing that it would use Palantir Foundry for defense projects.
Bank of America revamps Palantir outlook
AI is valuable only if it’s useful. Many argue that AI benefits are overblown, and as a result a reckoning is on tap. Certainly, the failure to help companies achieve a return on investment in AI risks a significant reduction in spending that could derail the entire industry.
To help prevent that, Palantir launched AI forward-deployed engineers, an agentic AI solution that intimately understands each customer’s business so it can build custom AI solutions.
“Our design philosophy is to make it so that any clicks that humans do in the [user interface] could be things that you can have an AI FDE do for you,” said Palantir Software Engineer Ankit Shankar at Palantir’s DevCon 3 in July.
Bank of America says forward-deployed engineers will be key to Palantir’s success.
“Palantir is leveraging on Agentic AI to extend the FDE capabilities to more use cases. The AI FDEs will accelerate growth,” wrote B of A analysts in a note to clients on Sept. 23. “We see the AI FDEs as an accelerator of growth.”
How much growth? A lot. Bank of America revamped its revenue projections and currently expects “Commercial sales to exceed $10 billion by 2030e (2025-30 [compounded annual growth rate] up to 40% from 38%).”
The potential for continued growth is big enough that Bank of America says Palantir’s stock price has more room to climb.
“We expect sales to grow 41% year over year in 2026e (up from prior [estimate] 36%) and 39% in 2027e (vs prior 39%),” said the analysts.
“We raise our [price objective] to $215 from $180 to reflect the stronger outyear growth estimates.”
Related: Palantir lands surprise AI deal with 109-year-old titan
