Palantir Earnings: U.S. Commercial Strength and Margin Expansion Mark a Robust Quarter for Palantir

We are raising our fair value estimate for narrow-moat Palantir to $13 from $11 after the firm reported a strong quarter with profitability well ahead of our prior estimates. Commercial deals and sales led the way as interest in Palantir’s AI solutions continues to provide an uplift to the firm. As more customer dollars are dedicated to spending on AI, we believe Palantir, a leader in the AI platform space, stands to benefit. As a result, we are optimistic about Palantir’s opportunities going forward, especially as AI-related spending is only projected to grow. At the same time, however, we remain unable to rationalize Palantir’s market valuation. With shares up sharply after the earnings report, we continue to view them as overvalued even after our fair value increase.