While Nvidia and other powerhouses known as the “Magnificent 7” have been in the limelight over the past year, one AI company has notably outperformed them in terms of returns. Palantir, whose shares have surged an astounding 514% in the past year, caught another wave of momentum in after-hours trading on Monday, surpassing the $100 mark for the first time. This leap was driven by the AI software analytics company’s stellar earnings and optimistic projections for 2025, fueled by the rapid adoption of AI technology.
Back in September 2024, readers of Seeking Alpha’s “Wall Street Breakfast” were asked to identify the market’s most underappreciated stock with the potential for significant returns. Palantir emerged as the crowd favorite at that time, when its stock was valued at $37. When the new year began, readers were again surveyed about the top AI stock to watch in 2025, and Palantir was the clear choice again, now trading at $70. Investors who took the plunge at those points experienced impressive gains of 178% and 47%, respectively, in just a short period.
Recently, Palantir has also been added to both the S&P 500 and Nasdaq 100, expanding its footprint across wider market ETFs and investment products. Additionally, its connection with the U.S. Department of Defense has intensified, pushing government sales up by 45% to $343 million in the latest quarter. On the commercial front, U.S. revenue soared by 64% to $214 million. Palantir’s Artificial Intelligence Platform (AIP), designed to help businesses employ complex AI models for data analytics and insights, has been instrumental in sealing these lucrative contracts. Efficiency strategies and anticipated increases in defense spending under the Trump administration are expected to continue boosting the company’s financial performance.
Chief Revenue Officer Ryan Taylor commented on an earnings call, “With AI models becoming more widespread, the available talent pool is expanding rapidly. While others focus on producing more models, we’re turning AI into tangible high-value products and services. This approach leads to the swift rise of measurable excellence for companies able to harness the power of these standardized models through AIP.”
Further insights from leadership came from CEO Alex Karp, who shared in a letter to shareholders, “We’re just at the beginning of a transformative journey that will unfold over years and decades. This isn’t a slight improvement or a small acceleration; it’s a significant new phase. The business we’ve created has gained its own momentum and drive, showing growth and output that far exceed our investments. A true software giant has emerged.”
