Killer Bees - Two AI Empires, Two Very Different Receipts

The Sting

Palantir just posted a 127% Rule of 40 score the kind of number that makes enterprise software analysts reach for the smelling salts. Meanwhile, Elon Musk merged his cash-incinerating AI startup into his rocket company and slapped a $1.25 trillion valuation on it. One of these companies showed the receipts. The other is asking you to trust the vision. The market is currently paying for both.

Deep Dive #1: Palantir Actually Did It

Here's what happened: Palantir dropped Q4 numbers Monday after the bell that made even the bulls blink. Revenue hit $1.41 billion up 70% year-over-year. U.S. commercial revenue surged 137%. The company guided to $7.18-$7.20 billion for 2026, absolutely demolishing the $6.22 billion consensus. Shares jumped 11% in Tuesday premarket after whipsawing between $144 and $161 in after-hours on volume north of 71 million shares.

But here's what the headlines missed: Palantir's U.S. commercial growth didn't just accelerate it doubled in twelve months. In Q4 2024, U.S. commercial was growing 64% year-over-year. By Q4 2025, it hit 137%. That's not incremental improvement. That's an inflection point. The company closed 180 deals worth $1 million or more, with total contract value hitting $4.26 billion up 138% from the prior year.

CEO Alex Karp called it "indisputably the best results I'm aware of in tech in the last decade." Normally that's the kind of quote you roll your eyes at. But the numbers actually back it up. The Rule of 40 that old SaaS metric combining revenue growth and operating margin came in at 127%. For context, most "best-in-class" enterprise software companies score in the 40s or 50s. Palantir is playing a different game.

What does price action tell us? The stock had been down 29% from its November peak heading into earnings, trading at roughly 142x forward earnings still the third-highest multiple in the S&P 500. The muted initial reaction (swinging wildly after hours before settling up 11% Tuesday) suggests the market had some of this priced in, but not the guidance. The 2026 revenue outlook beat consensus by 15%. That's not a whisper beat that's a reshaping of the narrative.

The question nobody's asking: If Palantir can sustain 115%+ U.S. commercial growth through 2026, what does international look like? Management essentially admitted international is lagging badly deal cycles are longer, AI adoption is "less standardized." At some point, the U.S. commercial TAM starts to matter. Or does it?

Deep Dive #2: Musk Builds the Everything Company (Again)

Monday also brought news that SpaceX acquired xAI in what Bloomberg called a $1.25 trillion combination. Musk announced it with characteristic modesty: "scaling to make a sentient sun to understand the Universe and extend the light of consciousness to the stars."

The actual math: SpaceX was valued at ~$800 billion in its December secondary share sale. xAI raised money at $230 billion in January. Slap them together, and you've got the world's most valuable private company, now prepping for what could be the largest IPO in history.

But here's what's really happening. xAI is burning roughly $1 billion per month. It burned $9.5 billion in cash through the first nine months of 2025. Revenue for all of 2025? Projected at $500 million. That's a burn multiple of approximately 19x for every dollar of revenue, xAI spent nineteen dollars. For comparison, the median SaaS burn multiple is 1.6x.

SpaceX, meanwhile, reportedly generated $8 billion in profit on $15-16 billion of revenue in 2025. The company is a cash machine. It owns the launch market. Starlink has 9 million customers and 9,000 satellites in orbit. The business works.

So what's the merger really about? Musk framed it as "space-based AI" data centers in orbit, powered by solar, cooling in the vacuum of space. "My estimate is that within 2 to 3 years, the lowest cost way to generate AI compute will be in space," he wrote. Maybe. Or maybe xAI needed a lifeline before IPO investors started asking harder questions about that burn rate.

There's also the Tesla question. Tesla just invested $2 billion in xAI last month. That investment now sits inside a SpaceX subsidiary. Tesla shareholders effectively own a sliver of SpaceX through a company that's losing $1 billion monthly. The circular nature of Musk's empire continues to tighten.

Chart of the Week: Palantir's Growth Acceleration

U.S. Commercial Revenue Growth, Year-over-Year

Source: Palantir Technologies quarterly earnings releases (BusinessWire)

This isn't a company coasting on a one-time AI bump. Palantir's U.S. commercial business has accelerated for five consecutive quarters. The growth rate more than doubled in twelve months. That almost never happens at this scale usually, you see deceleration as the base grows.

What makes this unusual: Most enterprise software growth stories are about "landing" new customers. Palantir's story is increasingly about expansion existing customers spending dramatically more. The company now projects U.S. commercial revenue above $3.14 billion for 2026, implying 115%+ growth on top of the 137% just posted. Either customers are deploying AIP across their entire operations, or Palantir is capturing wallet share at an unprecedented rate. Both would be bullish.

The Hive Mind

FinTwit is split down the middle on Palantir. The bulls are victory-lapping the guidance beat; the bears are pointing at the 142x earnings multiple and asking who's left to buy. Options flow is interesting puts got active heading into earnings, but the post-report action suggests shorts are covering, not pressing. Retail sentiment on Stocktwits flipped from "neutral" to "bullish" overnight.

On SpaceX-xAI, the reaction is more muted. Private company, no way to trade it directly. But the Tesla implications are getting attention "so now TSLA shareholders own a piece of a company losing a billion a month?" is the gist.

The Thread

Two AI stories this week. One showed you the numbers: 70% revenue growth, 137% U.S. commercial acceleration, a 127% Rule of 40 score. The other showed you the vision: space-based data centers, a "sentient sun," consciousness expanding to the stars. Palantir is selling software that works. Musk is selling a future that doesn't exist yet. The market is currently valuing them at $350 billion and $1.25 trillion, respectively. Which tells you everything about where we are in the AI cycle and absolutely nothing about where we're going.