Palantir's 1,700% Run Proved Me Wrong-Now the Valuation Looks Dangerous

My mistake was underestimating execution, not the stock

Palantir grew 84% in U.S. government revenue to $687 million and 133% in U.S. commercial revenue to $595 million. I was early. I kept treating PLTR like a valuation problem, but the market treated it like a proof problem-and Palantir kept delivering proof.

What I underestimated was how quickly results can reinforce momentum. After better-than-expected earnings, shares jumped in after-hours trading. Earlier, the defense-AI narrative had already sent the stock up 6.9% in early trading. When a company repeatedly backs its story with numbers, investors stop asking whether the narrative is real and start asking how late they are.

That is the real investor choice now. Palantir is not an unproven AI concept. It is a company that has ridden a 1,700% run over the past three years and, in one session tied to that momentum, added about $24.4 billion in market value. Bulls see strategic AI importance across government and commercial demand. Bears see a great business priced for very little error.

Palantir's operating record is real, even if the stock is expensive

Growth is broad, not just narrative-driven

After a 1,700% run over the past three years, it is easy to dismiss Palantir as a momentum trade fueled by AI enthusiasm. But the operating record is what made that move hard to ignore. In the latest quarter, Palantir reported revenue of $1.63 billion, ahead of analyst expectations, with growth coming from both enterprise and government customers. U.S. commercial revenue rose 133% and U.S. government revenue rose 84%. That points to demand across both enterprise AI adoption and defense analytics, not just a single promotional tailwind.

The government tailwind is still steepening

The strong quarter did not come out of nowhere. In the fourth quarter, Palantir reported U.S. government revenue jumped 66% in the fourth quarter to $570 million, helping lift total revenue to $1.41 billion, above expectations. Management also pointed to a sharp surge in sales in 2026, driven in part by government contracts. That keeps the trend active and shifts the debate: this is no longer about whether Palantir can grow. It is about how long that growth can continue at a pace that justifies the current valuation.

Maven matters because it deepens strategic relevance

The most important development is not just more revenue. It is deeper embedment. Reuters reported that Palantir's Maven AI system will become an official program of record for the Pentagon. That is a step beyond a promising capability; it signals a more permanent role inside military workflows. Investors likely noticed that shift too. After better-than-expected earnings, shares jumped in after-hours trading, suggesting the market was rewarding not only the quarter, but the idea that Palantir's defense role may be becoming more entrenched.

The business can keep executing; the stock may not have much room for disappointment

The operating story is clearly alive, and the latest results were strong enough to justify my change of heart on execution. The harder question is valuation. A company priced around a forward price-to-earnings ratio of about 131 does not need to grow quickly. It needs to keep growing well.

That is why Palantir still looks dangerous as a stock, even as it looks more credible as a business. The quarter proved me wrong. The valuation has not.