Palantir Earnings: U.S. Commercial Scores Yet Again for Palantir as AI Momentum Drives the Top Line

We are raising our fair value estimate for narrow-moat Palantir to $15 from $13 after the firm reported another strong quarter, with impressive sales growth matched by an increasingly attractive margin profile. Palantir’s AI platform, or AIP, continued to provide an uplift to the firm’s commercial sales as customer interest in Palantir’s AI solutions remained robust. We remain optimistic about Palantir’s growth opportunities in the AI space and expect robust sales expansion on the back of its AI solutions as more organizations adopt AI. Despite our bullish, above-consensus growth and profitability assumptions, we are unable to rationalize Palantir’s current valuation. With shares up double-digits after the earnings report, we continue to view them as overvalued relative to our updated fair value estimate.