Palantir Technologies has reached a new milestone, climbing into the ranks of the top 20 most valuable companies in the United States.
The software and data analytics firm, known for its work with defense and government agencies, saw its stock rise over 2% on Friday, pushing its market capitalization to $375 billion.
This latest gain puts Palantir ahead of consumer giants like Home Depot and Procter & Gamble, and even surpasses Bank of America and Coca-Cola in valuation.
AI Growth and Government Ties Fuel Rally
The company’s meteoric rise is largely attributed to investor optimism over its artificial intelligence business and its deepening ties with the U.S. government.
Founded in 2003 by Peter Thiel, CEO Alex Karp, and others, Palantir has steadily expanded its reach within both the public and private sectors.
In its latest quarterly results, Palantir reported a 45% year-over-year jump in revenue from its U.S. government segment, totaling $373 million.
Overall, the company saw a 39% increase in total revenue, reaching $884 million.
Palantir is set to report its next earnings on August 4, with many expecting another strong performance.
Sky-High Valuation Raises Eyebrows
While investors remain bullish, Palantir’s valuation is drawing attention for its lofty multiples.
According to FactSet, the stock is trading at 273 times forward earnings, making it the only company in the top 20—aside from Tesla—with a triple-digit price-to-earnings ratio.
Tesla, by comparison, is trading at 175 times forward earnings.
Such high multiples suggest that investors are pricing in significant future growth and continued dominance in the AI space.
Small Revenue, Big Market Cap
Despite its enormous market valuation, Palantir’s revenue remains relatively modest compared to its peers in the top 20.
With $3.1 billion in total revenue over the past year, it is dwarfed by the next smallest top-20 company by sales: Mastercard.
Mastercard boasts a $518 billion valuation and generated approximately $29 billion in revenue during the past four quarters.
Earlier this year, Palantir surpassed tech giants like Salesforce, IBM, and Cisco to enter the top 10 U.S. tech firms by market cap.
Investors Divided on Sustainability
While many view Palantir as a long-term AI powerhouse, some analysts caution that its stock may be overextended at current levels.
Skeptics point to the disparity between its revenue and valuation, warning that expectations may be running ahead of fundamentals.
Still, the company’s growing portfolio of government contracts and its position at the heart of the AI revolution continue to attract investor enthusiasm.
Whether Palantir can sustain this momentum remains to be seen, but for now, it stands as one of the most valuable companies in the country—a testament to Wall Street’s confidence in its future.