NOVEMBER 7, 2025 | FEATURES | By Cameron Lara
Author’s note: All market data, unless otherwise noted, is sourced from Google Finance and based on the price as of market close as of Tuesday, Nov. 4.
With a market capitalization exceeding $450 billion, Palantir is one of the world’s most valuable companies. The Denver-based software firm is worth more than Coca-Cola ($295 billion), Nike ($90 billion) and Target ($40 billion) combined, yet you may have never heard of it.
The firm, founded in 2003 by a group of Silicon Valley entrepreneurs, including venture capitalist, PayPal cofounder, prominent Trump backer Peter Thiel and current CEO Alex Karp, is notoriously secretive.
This secrecy arises not just from the nature of its work but, more importantly, from its client base.
Named for “palantíri,” the powerful seeing stones from J.R.R. Tolkien’s “The Lord of the Rings,” Palantir creates software that helps clients analyze large and potentially sensitive data sets, allowing them to aggregate various sources of information to detect patterns and anomalies.
In the wake of 9/11, Palantir’s founders saw potential in data mining technology, inspired by the anti-fraud software Thiel developed at PayPal, to help American intelligence agencies identify potential terrorist threats.
In a 2020 CNBC interview, Karp said the company’s founding mission was “to make the West, especially America, the strongest in the world…for the sake of global peace and prosperity.”
With the war on terror underway, the CIA found the company’s vision compelling. It became one of Palantir’s earliest backers—and its first customer—investing $2 million from its In-Q-Tel venture fund, which the agency created to fund the development of technologies with potential intelligence applications.
Since then, Palantir has partnered with nearly every federal intelligence and law enforcement agency, along with international clients, such as the Israeli Defense Forces (IDF).
As the company’s role in intelligence and law enforcement operations has expanded, it has faced increased scrutiny from critics who decry both what they see as invasive surveillance and the perpetuation of problematic policies.
Palantir also holds strong ties to ICE and the IDF.
ICE has used Palantir’s platforms to find and deport undocumented immigrants since 2011. The firm has faced protests and strong internal opposition against this work. In 2019, during Trump’s first term, more than 200 employees signed a letter to Karp expressing their concerns.
However, Palantir ultimately retained its contracts and was recently awarded another $30 million by ICE to develop a system to track self-deporting migrants which prompted the American Civil Liberties Union and Amnesty International to declare that Palantir is enabling “human rights violations” by aiding ICE in its operations.
Palantir’s work with the IDF has drawn similar criticism. Israel has used Palantir’s software, and in particular its new “Artificial Intelligence Platform” (AIP), throughout the war in Gaza (now recognized by the United Nations and the International Court of Justice as a genocide) to track Palestinians and identify targets for strikes.
Despite the pushback, Karp, who holds a PhD in social theory and is outspoken on many issues, sees this work as firmly aligned with Palantir’s mission.
Regarding ICE criticism, Karp acknowledged immigration as a “legitimate, complex” issue, but also asserted that “there are rules [and] they should be enforced.”
Similarly, Karp has been an outspoken supporter of Israel since the Oct. 7 attack, which he called “one of the worst terror attacks the West has ever seen.” Karp said that he is “proud” Palantir’s products have been used to defend a “thoroughly democratic, Western country.”
Investors find Palantir equally polarizing. Boosters view its $450 billion valuation as justified by rapid growth (revenue grew by 63% year over year, according to the company’s latest earnings report) and its central position in AI-driven analysis.
These investors have fueled an epic stock rally, with the company’s share price surging more than 360% in the last year and nearly 2,000% since it went public in 2020.
Critics argue that the company is massively overvalued, pointing to its exceptionally high price-to-sales (P/S) and price-to-earnings (P/E) ratios, which are calculated by dividing a company’s stock price by its revenue (sales) and net income (earnings), respectively.
Palantir is currently valued at about 100 times its projected 2025 revenue of $4.4 billion and has a P/E ratio of 633, according to Google Finance. This means that when investors purchase Palantir’s stock, they are willing to pay $137 for every dollar in revenue Palantir generates and $633 for every dollar in profit. To put this in context, the average P/S and P/E ratios among S&P 500 component companies are 3.4 and 30.8, respectively, making Palantir extremely richly valued by conventional standards.
Even if these numbers are justified, Palantir’s stratospheric valuation reflects an incredibly frothy market caught up in an “AI bubble,” with investors betting AI will become ubiquitous in the future.
The skepticism is growing. Palantir’s stock fell nearly 8% even after topping Wall Street’s expectations in its latest report. Part of this decline was fueled by news that renowned investor Michael Burry—subject of “The Big Short”—had shorted both Palantir and semiconductor juggernaut Nvidia, effectively betting that the AI bubble would end much like the housing crash he foresaw in 2008.
This shift in opinion could mark an inflection point. Suppose Palantir’s financial might erodes and the AI fervor fades. In that case, the skeptics may feel emboldened to ask harder questions—about how its technology is used, about how it handles vast troves of consumer data, about why the US still lacks a federal privacy law.
In a 2019 Bloomberg interview, Karp himself argued that decisions about how AI software is used should reside with governments and society at large—not, as he put it, with a “motley crew” of Silicon Valley engineers imposing their own values.
According to Karp, those decisions should rest not with Palantir, Silicon Valley, or the market, but with the greater public.