Palantir Technologies continues to defy market expectations in 2025, maintaining exceptional momentum while most technology stocks face significant headwinds. The data analytics and AI software company has seen its shares surge 74% this year, including an 8% jump on May 30, making it one of the top performers in the S&P 500.
Tech stocks have struggled in 2025, as recession and trade war fears sap investor appetite for riskier assets. Palantir is the exception. Against a volatile market backdrop, the software maker's stock has gained 45% and is the best performer among companies valued at $5 billion or more, according to FactSet. The stock has been a major outlier in recent months, continuing to pop while its tech peers have been weighed down by tariff uncertainty and fears of an economic slowdown. The Nasdaq is down 7% this year even after bouncing back some over the past three weeks.
The company's first-quarter results for 2025 demonstrated the strength of its business model. The defense technology company said that its commercial revenues grew 71% from a year ago to $255 million, while its government segment sales jumped 45% to $373 million. The company is forecasting that U.S. commercial revenues will top $1.178 billion this year. Palantir beat estimates for first-quarter revenue and boosted its full-year guidance as companies adopt its AI software. "We are delivering the operating system for the modern enterprise in the era of AI," CEO Alex Karp wrote in an earnings release Monday.
At the heart of Palantir's success is its Artificial Intelligence Platform (AIP), which has become a critical tool for both government and enterprise clients. Palantir AIP powers real-time, AI-driven decision-making in the most critical commercial and government contexts around the world. From public health to battery production, organizations depend on Palantir to safely, securely, and effectively leverage AI in their enterprises — and drive operational results. In short, Palantir AIP connects generative AI to operations.
In April 2023, the company launched Artificial Intelligence Platform (AIP) which integrates large language models into privately operated networks. The company demonstrated its use in war, where a military operator could deploy operations and receive responses via an AI chatbot. Since then, AIP has evolved significantly, with the company's Artificial Intelligence Platform (AIP) continuing to attract new clients across sectors like healthcare and financial services. While Palantir's core government customer base provides a strong revenue floor, the key question is how quickly it can monetize its AI offerings. Investors are keenly watching adoption trends for AIP, particularly in the U.S. commercial market, which has grown rapidly thanks to a "boot camp-style" onboarding model.
Despite its impressive performance, some analysts remain cautious about Palantir's lofty valuation. The stock rose about 8%, lifting the company's valuation to $281 billion, surpassing Salesforce, which is 10 times bigger in terms of revenue. Investors are paying a premium for Palantir, which currently trades for 520 times trailing earnings. However, supporters argue that the bull case for Palantir is centered on its unique position at the intersection of AI and national security. Bulls argue that the company's ontology-driven platform represents the most advanced implementation of AI orchestration in enterprise software, enabling unprecedented efficiency and decision-making.
As AI adoption accelerates across industries, Palantir appears well-positioned to continue its growth trajectory, potentially cementing its status as one of the most valuable AI companies in the world.