Leadership team with strong track record, and incredible growth numbers
Catalysts
U.S. commercial keeps growing above 100%. This is the single most important number. As long as the corporate business keeps growing at triple-digit rates, the market will keep paying a premium and the stock can re-rate higher. Any quarter that confirms this is a positive catalyst.
The valuation "grows into" itself. The stock is expensive on today's earnings, but if revenue keeps compounding at 70%+, the company can essentially grow into its high price over a couple of years. If that happens without the stock falling, that is itself a quiet win.
Bigger and longer contracts. Palantir has been signing larger deals (47 deals worth $10M+ last quarter alone) with names like Airbus, GE Aerospace, Stellantis, and Bain. A few very large multi-year enterprise deals would reinforce that the commercial story is durable, not a fad.
A friendly government environment. Continued strong federal and defense spending, plus Palantir's favored-vendor status, could keep producing large government contract wins and expansions, especially in defense modernization.
Key risks
The valuation is extreme. The stock trades around 97 times forward earnings, far higher than even other top AI names. That means the price already assumes years of near-perfect execution. Even a small disappointment can cause a sharp drop, which is exactly why the stock is down about 26% this year despite a blowout quarter.
Growth eventually has to slow. No company grows 85% forever. The moment U.S. commercial growth dips meaningfully below triple digits, the market may decide the premium is no longer justified and re-rate the stock downward, even if the business is still healthy.
Heavy reliance on the government and its politics. A large share of revenue still comes from federal contracts, and Palantir's current strength is partly tied to political favor under the current administration. A change in administration, defense priorities, or public sentiment around surveillance and immigration work could slow that business or invite scrutiny.
Sentiment can swing hard. Palantir has a large, enthusiastic retail following, which makes the stock move violently on emotion in both directions. The price can drop sharply for reasons that have nothing to do with the underlying business.
Portfolio position
15.3% of TFSA+413.09%
Palantir Technologies (PLTR) Hold Thesis Brief
Current Price: ~$136
Market Cap: ~$320B
Sector Classification: AI Software / Application Layer
Verdict: Continued hold. The business is performing better than at any point since it went public. The only real debate is valuation, not quality, and at a $20 cost basis you have an enormous cushion to ride out the volatility.
Why I Own It (Plain English)
Palantir builds software that helps large organizations pull all their messy, scattered data into one place and then make decisions on top of it. Originally this was mostly for the U.S. government (military, intelligence, defense), where Palantir became the trusted system for handling sensitive operations. Over the last few years it has expanded aggressively into the corporate world, where companies use the same kind of software to run factories, supply chains, hospitals, and banks.
The simple way to think about it: most companies are drowning in data but starving for decisions. Palantir is the layer that turns the data into action. With the arrival of AI, that role has become far more valuable, because Palantir's platform is how a company actually puts AI to work on its own private data instead of just experimenting with chatbots.
I bought at around $20. At ~$136 today, the position is up roughly 580%. The reason I continue to hold rather than sell is that the business is still accelerating, not slowing down. This is rare. Most companies this size grow slower over time. Palantir is doing the opposite.
What the Business Looks Like Right Now
The most recent quarter (Q1 2026, reported May 4) was the strongest in the company's history as a public company:
Metric
Result
What It Means
Total revenue
$1.63B, up 85% year-over-year
Fastest growth since going public in 2020
U.S. commercial revenue
$595M, up 133%
The corporate business is exploding
U.S. government revenue
$687M, up 84%
Government is accelerating, not fading
Net income
$871M (53% margin)
Genuinely, deeply profitable
Adjusted free cash flow
$925M (57% margin)
Converts profit to cash extremely well
Rule of 40 score
145%
A measure of growth + profit; anything over 40 is good, 145 is extraordinary
Cash on hand
$8.0B
No debt pressure, fully self-funded
Full-year 2026 guidance
Raised to ~$7.65B (71% growth)
Biggest guidance raise in company history
The key takeaway: Palantir is growing like a young startup but earning profits like a mature software company. That combination is very unusual at this scale.
Why It's a Continued Hold
The growth is accelerating, not slowing. An 85% growth rate at a company this size is almost unheard of. When a business keeps speeding up instead of slowing down, selling early usually turns out to be a mistake.
The U.S. commercial business is the real prize. For years the knock on Palantir was that it depended on slow government contracts. That story is now broken. U.S. commercial revenue grew 133% and the backlog of signed commercial work is up 112%. This is the part that justifies a premium and it is firing.
Your cost basis changes the math entirely. At a $20 entry, you are not making a "buy at $136" decision. You are deciding whether to keep a position that has already multiplied almost 7x. The stock could fall a long way and you would still be far ahead. That cushion lets you tolerate the volatility that scares out newer buyers.
It throws off real cash. Unlike many high-growth names, Palantir is not burning money to grow. It generated $925M of free cash flow in a single quarter at a 57% margin, and sits on $8B of cash. It can fund its own growth indefinitely.
It is becoming the default way companies deploy AI. As more organizations move from "experimenting with AI" to "actually running AI on our own data," Palantir's platform is increasingly the tool they use. This is a structural tailwind that is still early.
The Government Connection (Worth Understanding Honestly)
A meaningful part of Palantir's strength is tied to its deep relationship with the U.S. government, and that relationship has arguably gotten warmer under the current administration. This cuts both ways and you should hold it consciously.
On the positive side, Palantir is widely viewed as a favored vendor for defense and federal data work. Its leadership has been openly aligned with priorities around military modernization, border and immigration systems, and government efficiency, and the company has continued to win and expand large federal contracts. U.S. government revenue grew 84% last quarter and actually sped up from the prior quarter. An administration that prioritizes defense technology and data-driven government is a tailwind for that part of the business.
The honest flip side is that political favor is not permanent. A future administration with different priorities, or a shift in the political mood around defense spending, surveillance, and immigration enforcement, could slow federal contract momentum or subject Palantir to more scrutiny. The company's public political alignment, which helps today, could become a liability if the political winds change. This is a genuine dependency, not a fully diversified business, even though the commercial side is reducing that reliance every quarter.
The reassuring trend is that the commercial business is growing faster than the government business, which means that over time Palantir is becoming less dependent on Washington, not more. But for now, government remains a major pillar, and that pillar is partly political.
Catalysts (What Could Drive It Higher)
U.S. commercial keeps growing above 100%. This is the single most important number. As long as the corporate business keeps growing at triple-digit rates, the market will keep paying a premium and the stock can re-rate higher. Any quarter that confirms this is a positive catalyst.
The valuation "grows into" itself. The stock is expensive on today's earnings, but if revenue keeps compounding at 70%+, the company can essentially grow into its high price over a couple of years. If that happens without the stock falling, that is itself a quiet win.
Bigger and longer contracts. Palantir has been signing larger deals (47 deals worth $10M+ last quarter alone) with names like Airbus, GE Aerospace, Stellantis, and Bain. A few very large multi-year enterprise deals would reinforce that the commercial story is durable, not a fad.
A friendly government environment. Continued strong federal and defense spending, plus Palantir's favored-vendor status, could keep producing large government contract wins and expansions, especially in defense modernization.
Key Risks (What Could Go Wrong)
The valuation is extreme. The stock trades around 97 times forward earnings, far higher than even other top AI names. That means the price already assumes years of near-perfect execution. Even a small disappointment can cause a sharp drop, which is exactly why the stock is down about 26% this year despite a blowout quarter.
Growth eventually has to slow. No company grows 85% forever. The moment U.S. commercial growth dips meaningfully below triple digits, the market may decide the premium is no longer justified and re-rate the stock downward, even if the business is still healthy.
Heavy reliance on the government and its politics. A large share of revenue still comes from federal contracts, and Palantir's current strength is partly tied to political favor under the current administration. A change in administration, defense priorities, or public sentiment around surveillance and immigration work could slow that business or invite scrutiny.
Sentiment can swing hard. Palantir has a large, enthusiastic retail following, which makes the stock move violently on emotion in both directions. The price can drop sharply for reasons that have nothing to do with the underlying business.
Bottom Line
At a $20 cost basis, this is a position to hold and let run, not to second-guess on day-to-day price moves. The business is executing at an exceptional level: accelerating growth, real profits, strong cash generation, and a commercial business that is finally proving the bears wrong. The genuine risks are the rich valuation and the partial dependence on government and political favor, both of which deserve monitoring. But none of those are reasons to abandon a high-quality, accelerating business while it is still compounding. The plan is to hold, stay aware of the U.S. commercial growth rate as the key health signal, and let the enormous gain cushion absorb the volatility.