1 Reason Wall Street Is Obsessed With Palantir Stock
Palantir Technologies' stock has surged approximately 400% over the past year, significantly outperforming the S&P 500. The company's recent success in its commercial business, particularly with its AI Platform, has attracted Wall Street's attention. In Q2, Palantir's U.S. commercial revenue rose 93% year-over-year to $306 million, making up about 30.5% of total revenue. This growth indicates a promising long-term potential for the company, despite its stock becoming expensive due to heightened interest.
When you think of stocks that have had immense success over the past year, it's hard not to think of software company Palantir Technologies (PLTR -0.98%). In that time, its stock is up around 400%, far more than the S&P 500 (^GSPC -0.43%), which is up around 14%, or any other S&P 500 stock in that span.
Like many other stocks, Palantir has been a huge beneficiary of recent artificial intelligence (AI) hype, but there seems to be a specific reason Wall Street has increasingly become obsessed with the stock: the recent success of its commercial business.
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For most of its existence, Palantir's main platform, Gotham, has been built mainly for government entities like the CIA, Department of Defense, and FBI. Although this has been a good business for Palantir, relying solely on government contracts could limit growth due to future budget constraints and political volatility.
With the introduction of Palantir's AI Platform (AIP) -- which is designed to use AI to automate operational processes -- it has shown that it can be successful in catering to commercial businesses. In the second quarter (Q2), Palantir's U.S. commercial business increased revenue 93% year over year to $306 million and accounted for around 30.5% of its total revenue.
Here is how much the segment made in the previous three quarters:
- Q1 2025: $255 million
- Q4 2024: $214 million
- Q3 2024: $179 milliom
- Q2 2024: $159 million
With Palantir's commercial business showing promise, its total addressable market is always widening. The stock has admittedly become very expensive with Wall Street's obsession, but its long-term growth potential just became more promising.
