Palantir Technologies Inc. (PLTR) has become the poster child for retail investor enthusiasm in the AI era. The stock is up 157% this year, and ordinary investors are putting their money where the hype is.
Take Kyle Dijamco, a Los Angeles-based marketer who represents Palantir's fast-growing retail investor base. He doubled down after an earlier pullback and now holds roughly $25,000 worth of shares, according to CNBC. He's far from alone.
Retail investors are projected to pour nearly $8 billion into Palantir stock in 2025, according to Vanda data through December 8. That's more than 80% higher than last year and over 400% above 2023 levels. While Main Street is buying aggressively, Wall Street remains skeptical about valuation, and institutional participation hasn't kept pace.
Commercial Business Gains Steam
Despite the valuation hand-wringing, Bank of America Securities came away from recent meetings with Palantir feeling more confident about the growth story. Analyst Mariana Perez Mora highlighted strong momentum in the company's U.S. commercial operations, pointing to a growing backlog, shorter contract durations, and customers rapidly moving deeper into Palantir's value chain.
The faster contract cycles matter because they suggest customers are seeing results quickly enough to expand their commitments. That's the kind of traction AI vendors dream about.
Government Contracts Provide Stability
Mora also called attention to Palantir's government segment, citing a recent two-year contract worth $448 million. While critics continue raising alarms about potential surveillance risks from Palantir's technology, the analyst believes the company's momentum remains solid.
She added that Palantir could expand margins as operating leverage improves with each new use case. As AI capabilities evolve rapidly, enterprises are increasingly viewing Palantir's infrastructure as essential for keeping pace with technological advances.
Another Earnings Beat
Palantir kept its winning streak alive by delivering another quarterly earnings beat and raising guidance. In November, the AI and data analytics company reported earnings per share of 21 cents versus analyst expectations of 17 cents. Revenue climbed 62.8% year over year to $1.18 billion.
The company lifted its outlook substantially, projecting fourth-quarter revenue roughly 12% above consensus estimates and forecasting 300 basis points of operating margin expansion. Even at a premium valuation, Palantir's revenue growth rate and Rule of 40 score remain well ahead of industry peers.
PLTR Price Action: Palantir Technologies shares were up 0.14% at $194.45 during premarket trading on Friday, according to market data.