There are numbers, and then there are numbers that defy gravity. Palantir Technologies (PLTR) currently deals in the latter. The data analytics firm has seen its stock appreciate by a staggering figure—over 2,600% since the beginning of 2023. This has catapulted its market capitalization to roughly $420 billion, placing it in the same league as some of the world's most established corporate giants.
The software is, by all accounts, impressive. Its platforms, Gotham and Foundry, are deeply embedded in government and commercial sectors, making sense of chaotic data streams in a way few others can. Success stories are plentiful. But a successful business and a rationally priced stock are two very different things, and right now, they appear to have completely uncoupled.
Palantir trades at 277 times forward earnings. Let that number sink in. It’s a valuation that doesn't just suggest optimism; it suggests a belief in a future so radically different from the present that conventional metrics cease to apply. This is the part of the analysis where I find myself genuinely puzzled. The math requires a level of sustained, hyper-growth that is historically unprecedented for a company of this scale. Should Palantir manage to grow its revenue by 50% annually for the next five years while achieving a best-in-class 35% profit margin, it would still be trading at 46 times its 2030 earnings.
This isn't a growth story. It's a faith-based initiative. And it begs the question: What, precisely, are investors buying when they click the button on PLTR?
To understand the sheer altitude of Palantir’s valuation, it’s useful to ground the conversation with two of its peers in the AI arms race: ASML and Advanced Micro Devices (AMD). Neither is a slouch. AMD has a market cap of $378 billion, and ASML is hovering around $400 billion (a figure that places it just shy of Palantir’s). Both are essential cogs in the AI machine, yet their valuations are tethered to a much more tangible reality.
ASML is a beautiful case study in a technological monopoly. The Dutch company is the sole producer of the extreme ultraviolet (EUV) lithography machines required to etch the world’s most advanced semiconductors. If you want to build a cutting-edge AI chip, you have to go through ASML. There is no alternative. Its fortune is directly correlated with the global demand for silicon, a demand that AI has supercharged. It's a simple, powerful, and quantifiable investment thesis.
AMD, meanwhile, is the scrappy challenger that has finally landed a solid punch on the champion, Nvidia. Its recent contract wins for its GPUs signal that the market is desperately seeking a viable second source for AI computing power. While many of these deals won't materially impact the company's financials until 2026, they represent concrete business victories. You can model the revenue, project the margins, and arrive at a valuation that, while certainly not cheap, exists in the same universe as its financial statements.
This brings us to the core of the discrepancy. Palantir's stock is like a stunning concept car at an auto show. It’s sleek, it promises a revolutionary future, and it draws a massive crowd of admirers who are captivated by the vision. But you can't drive it off the lot. Its performance is entirely theoretical. ASML and AMD, by contrast, are the high-performance engines and transmissions being built and installed in millions of vehicles on the road today. One is a bet on a narrative; the others are a bet on production.
So, why does the market value the narrative at such a premium? The stock has risen by more than 2,600%—to be precise, the data reflects a run-up since the start of 2023, an astonishingly short period for such gains. This kind of momentum isn't driven by spreadsheets alone. It's driven by something more powerful, and potentially more volatile: ideology.
The variable that financial models can’t easily quantify is Palantir’s co-founder and CEO, Alex Karp. I've analyzed the public statements of dozens of tech CEOs, and Karp's level of overt political alignment is a significant outlier. Leaders of companies this size typically aim for a more neutral public posture to avoid alienating customers, employees, or investors. Karp has chosen the opposite path.
A recent interview, in which the Palantir CEO defends support of Trump, addresses claims he's gone 'full MAGA', highlights this choice. In it, he stated he aligns with the former president on border and national security issues, dismissed claims that he’s gone 'full MAGA' as a product of 'Trump Derangement Syndrome,' and praised Trump’s tenure as producing 'world-historic accomplishments.' He explicitly frames Palantir’s mission in geopolitical terms, arguing for a level of strength that makes war obsolete—a vision he sees reflected in Trump's "peace president" approach.
This isn't just a CEO sharing his personal politics. This is a founder intertwining his company's identity with a specific, and polarizing, political worldview. For a certain type of investor, this is the entire thesis. They aren't just buying a piece of a software company; they are funding an ideology they believe in. They are investing in a vision of a secure Western world, powered by Palantir's data-driven tools, and led by figures like Trump.
This transforms the stock into a different kind of asset. But it also introduces a set of questions that are impossible to answer with an earnings report. How much of Palantir’s valuation is a premium paid by investors who are buying into Karp's political and geopolitical vision? What happens to that premium if the political winds shift dramatically? Is the market correctly pricing in the risk that comes with being so closely tied to one side of a deeply divided political landscape, or is this a personality-driven bubble waiting for a pin?
A Prediction: 2 Brilliant Stocks That Will Be Worth More Than Palantir Technologies by Year's End in 2026 suggests this outcome, which feels less like a bold proclamation and more like a reversion to the mean. It’s a bet that the tangible, measurable, and monopolistic business of silicon manufacturing and the hard-won market share of a chip designer will ultimately prove more durable than a valuation built on a foundation of both code and conviction.
Ultimately, the comparison is flawed. AMD and ASML are technology stocks. Palantir is a technology stock that moonlights as a political instrument. An investment in ASML is a clear-eyed bet on the future of computing. An investment in Palantir is a bet on the future of computing and a bet on a specific political outcome for the United States and its allies. The fundamental risk is that, over the long term, markets have a ruthless habit of caring far more about profit margins than political manifestos. Gravity, in the end, always wins.
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