Palantir shares surged north by more than 27% on Tuesday after the company reported quarterly earnings that CEO Alex Karp called “otherworldly” in a call with analysts Monday evening.
While some analysts were quick to frame the nearly 30% pop as recovery from a sell-off through June and July that saw Palantir wrapped into the doubts around the staying power of the software sector, the run-up extends a rally going back to 2024 that has seen the stock price boom from roughly $25 to more than $150 per share in only two years.
That shift in share price can really be traced back to the 2023 launch of Palantir’s AIP platform, said Louie DiPalma, an industrials sector analyst at William Blair.
The company’s existing platforms — Gotham for government operations and Foundry for the commercial sector — allowed customers to fuse massive amounts of disparate data and perform complex analysis of that data. AIP, released in April 2023 shortly after OpenAI debuted ChatGPT the previous November, allowed customers on both platforms to connect large language models to their existing datasets, layering AI-powered analysis and computation on top of Gotham and Foundry.
The product “gained particular traction across end-market verticals,” DiPalma said, and served as a clear catalyst for the stock’s explosive growth. As the market bought into the promise of AI, the Street turned toward the company that already provided the data analysis software for both the US government and many of the world’s largest companies, from energy majors ExxonMobil (XOM) and BP (BP) to Airbus (AIR.DE) and mining giant Rio Tinto (RIO).
When Anthropic raised its most recent funding round, the frontier AI lab disclosed $47 billion in annualized run-rate revenue, with most of that revenue accounted for by the company’s enterprise offerings, per analyst estimates. Palantir, by contrast, reported US commercial revenue of $764 million, with a remaining deal value of $6.24 billion.
“Investors should view [Anthropic’s ARR] as a bullish data point for Palantir, as that’s indicative of the total addressable market Palantir is also targeting,” DiPalma said. “There’s the potential that Palantir is going to significantly increase that as it’s going after the same workloads as Anthropic, OpenAI, and the other frontier labs.”
Late 2023 also marked the first quarters of profitability for Palantir, where net income sustainably flipped out of the red, a key bull signal for Wall Street. With the boom in enterprise AI that began in 2024, Palantir’s profits have raced upward since then, growing to adjusted net income of $1.05 billion in the second quarter.
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