Is Palantir (PLTR) a Buy for Investors Today After Its First Billion-Dollar Earnings Report?

The artificial-intelligence ("AI") gold rush is here for Palantir Technologies (PLTR)...

The company's software weaves together scattered threads of data across government departments and international corporations.

It does everything from developing platforms for nuclear power plant construction... to untangling hospital billing... to helping defense organizations see patterns before they appear on radar screens.

As my colleague Josh Baylin recently wrote...

Palantir isn't just a defense play, it's a bet on behavioral prediction. Its platforms help institutions prepare for the unpredictable – from insider threats to reputational landmines.

There is a lot of justifiable excitement about the company's software becoming essential infrastructure for the AI age.

After all, Palantir's stock is up more than 500% over the past year...

But it's also now trading at nosebleed valuations... And PLTR stock could represent far more risk than reward for investors buying today.

The Company Builds Operating Systems for Data

Palantir has three core "operating system" platforms...

1. Gotham is a platform for mission‑critical intelligence software. It stitches together classified and open‑source data for agencies from the U.S. Special Operations Command to the Ukrainian Ministry of Defense.
2. Foundry is a no‑code platform that lets Fortune 500 manufacturers, banks, and airlines rebuild supply chains in real time.
3. Apollo is the continuous‑delivery backbone that updates both Gotham and Foundry across air‑gapped government clouds and edge devices.

That trio of platforms also powers newer AI initiatives that let customers finetune large language models on proprietary datasets without exposing sensitive information.

These platforms are what the company uses to build bespoke solutions for its various contracts – from tracking Osama bin Laden for the Defense Department to combatting cyber fraud at major banks like JPMorgan Chase (JPM).

Palantir's Most Recent Blowout Quarter

On Monday, Palantir reported second-quarter sales of just over $1 billion... its first-ever billion-dollar quarter.

U.S. revenue soared 68% from the prior year to $733 million.

Most important for investors, Palantir is rapidly expanding from its former defense-industry focus into the corporate world, posting 93% year-over-year growth in U.S. commercial revenue to $306 million, compared with 53% growth in government revenue of $426 million.

The company boasts a 57% margin on adjusted free cash flow... And management once again raised full-year revenue guidance to $4.1 billion, above its previous guidance and Wall Street's expectations of around $3.9 billion.

Everything seems rosy for Palantir... And management certainly sounds confident, with CEO and cofounder Alex Karp writing in a note to shareholders:

With continued execution, and a focus on what matters and a near complete disinterest in what does not, we believe that Palantir will become the dominant software company of the future.

And the market is now waking up to this reality.

So, as practically every corporation and government agency is embedding an expense line for AI in almost every budget... what could go wrong?

Does Valuation Still Matter for Palantir?

MarketWise CEO Dr. David "Doc" Eifrig recently asked his readers to think back to Cisco Systems (CSCO) in the early 2000s...

Cisco reaped the benefits of the dot-com boom, even though it wasn't a literal "dot-com company." It made the routers and switches that powered the Internet.

Cisco was dominant. As of 1996, it controlled 78% of the router market. And it enjoyed strong margins and returns on capital.

The problem was... Cisco's price-to-sales ratio soared to 63 times, a high valuation for any company. 

Even though practically every single rosy prediction about the company came true...  

For example, it still dominates networking equipment. And the Internet was the single-biggest growth story that investors should have owned.

Today, although Cisco's operating income has now grown to an average of more than $3 billion per quarter... its valuation has fallen to less than 5 times sales. That's why CSCO's share price still hasn't returned to its former peak.

We share this story today because Palantir currently trades for more than 100 times sales.

As a result, Palantir gets a B grade overall for its Stansberry Score.

It crushes on financial metrics... but comes in below average for its capital efficiency and valuation.

Should Investors Buy Palantir?

Palantir remains one of the market's purest plays on applied AI at scale...

But the stock's valuation will force investors to weigh its growth narrative against its rich valuation every single quarter.

So while investors buying Palantir for the AI boom might do well... potentially, very well... Wall Street legend and Stansberry Research editor Whitney Tilson says he sees even more upside in powering the AI boom.

Whitney has recently detailed a secretive project that he's calling "Amazon Helios." That's what he's calling the extraordinary advancements in nuclear fusion.

And he's not the only one. Tech moguls – including Palantir chairman Peter Thiel, Amazon (AMZN) founder Jeff Bezos, and OpenAI CEO Sam Altman – are practically shoveling money into fusion projects.

And for investors today, Whitney has found a little company that may have the best chance of turning fusion into a reality. CNBC calls it "a leader in the nascent space."

Unfortunately, this company is off-limits to most individual investors. Only accredited investors can take a stake in it. 

But by clicking here, you can learn how Whitney has found a "backdoor" into this fusion company – one that can be accessed by any investor with $30 in his or her brokerage account.