Palantir PLTR ( ▲ 0.05% ) entered August with plenty of believers, plenty of skeptics, and a valuation that gave both sides something to talk about.

Then the stock jumped 51%.

Case closed? Not quite.

→ Revenue accelerated from 48% → 85% → 93%.
→ U.S. commercial revenue surged 149%.
→ And Palantir logged its ninth consecutive quarterly EPS beat.

And somehow, after another enormous rally, the argument over whether Palantir is too expensive has become more complicated, not less.

So we went through the growth, the valuation, and one increasingly important bet Alex Karp is making about AI...

...to see what keeps moving the goalposts.⇩

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Palantir's growth is actually accelerating. ↓

Revenue growth went from 48% a year ago, to 85% in Q1, to 93% in Q2.

And it isn't taking an equally large increase in spending to get there.

→ Sales and marketing expenses rose 39%.
→ Total operating expenses rose 34%.
→ Revenue rose 93%.

Meanwhile, adjusted free cash flow reached $1.22 billion, with the margin expanding from 57% to 63%.

That's the part worth paying attention to:

Palantir isn't just getting bigger. It's getting more profitable as it gets bigger.↓

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There are plenty of companies trying to build the best AI model.

Palantir would rather help decide what those models are allowed to see.

OpenAI, Anthropic and the rest of the frontier labs are building increasingly powerful models. But inside a large company, plugging a model into the business isn't quite as simple as opening ChatGPT and asking it to look at a spreadsheet.

There are customer records. Supply chains. Internal forecasts. Proprietary processes. Government data.

And Alex Karp argues that companies plugging frontier models into their businesses risk giving away the very data, workflows and institutional knowledge that make them valuable.

His version was considerably more direct:
“Their competitive advantage should never become the training data for future models.” — Alex Karp, CEO, Palantir

That’s the idea behind what Palantir calls AI sovereignty: use powerful models, but keep control of the underlying data, permissions and operations. Karp made that argument alongside Palantir’s Q2 results, when revenue grew 93% and U.S. commercial revenue jumped 149%.

→ That could leave Palantir in a useful position — sitting between companies, their data, and whichever AI models they choose to use.

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Less than two months later, the issue Karp was talking about started appearing elsewhere.

Reuters reported this week that Palantir, Nvidia and Booz Allen Hamilton have been reconsidering some uses of advanced OpenAI and Anthropic models over protections for proprietary data and intellectual property.

Palantir has reportedly pushed for zero-data-retention commitments from Anthropic, while Nvidia has restricted Anthropic models from certain sensitive work.

And then Nvidia went one step further.

Last week, it announced a new “sovereign AI” supply-chain system with Palantir, combining Nvidia’s Nemotron models with Palantir’s software.

The first customer?

Nvidia itself.

✱ If more companies decide they want to use the best AI models without giving up control of their data, Palantir has a clear role to play.

!!! And if that demand keeps growing, so does the case that Palantir’s growth has further to run.

If Palantir’s business is unusual, Wall Street’s attempts to value it might be even more so.

The current analyst range stretches from roughly $80 to $255.

At around $173, Palantir sits almost exactly where you'd expect a stock like this to sit: in the middle of an argument.

→ The bulls see revenue accelerating to 93%, U.S. commercial growth at 149%, expanding margins, and a company finding an increasingly valuable role in enterprise AI.

→ The bears see the same growth — and a valuation that leaves very little room for it to slow down.

The disagreement isn’t really over whether Palantir is growing.

It’s over how long it can keep growing like this.

This is what makes Palantir difficult to compare.

Snowflake SNOW ( ▲ 3.17% ) is growing quickly, but still posting a negative operating margin. Salesforce is profitable, but growing much more slowly.
C3ai  AI ( ▼ 1.48% ) is shrinking while losses remain substantial.

Palantir is sitting in the unusual corner of the table:

93% growth. 32% operating margin. At the same time.

And that brings us to the part Wall Street can’t agree on:

What do you pay for that?

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