The One Reason Wall Street Can’t Stop Obsessing Over Palantir Stock

Wall Street's latest obsession isn't another AI startup or crypto play—it's a data analytics firm that's been quietly powering government contracts for years.

Palantir's secret sauce? Their proprietary platforms handle massive datasets that would make traditional analysts weep. They're not just processing information—they're predicting outcomes before competitors even know what questions to ask.

The institutional money keeps flowing in because Palantir delivers something rare in tech: actual revenue from actual contracts. No vaporware, no hypothetical moonshots—just cold, hard government checks and enterprise deals that keep compounding.

Sure, the valuation makes traditional finance guys clutch their pearls—but when you're printing money with defense contracts while Silicon Valley burns VC cash, even the most cynical Wall Street types have to pay attention. Sometimes the smartest trade is betting on the company that actually gets paid.

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Why the obsession with Palantir?

The reason why Wall Street has become obsessed with Palantir is that the company has demonstrated that it's not a one-trick pony.

For a while, Palantir was viewed as a niche data software company that served government agencies like the U.S. Department of Defense and CIA. However, the growth of its U.S. commercial business -- thanks to its Artificial Intelligence Platform (AIP) -- has shown that the company can scale in the private sector and compete in the mainstream enterprise AI space.

In the second quarter, Palantir's U.S. commercial business increased its revenue 93% year over year to $306 million. Although it didn't earn more than Palantir's U.S. government revenue ($426 million), it was easily its fastest-growing segment.

Should you also be obsessed with Palantir?

Palantir showing additional revenue streams is encouraging, but if you're not currently an investor, you should proceed with caution before going all in on the stock because of its extremely high valuation. Palantir is currently trading at close to 267 times its forward earnings, which is one of the highest in history on the stock market, regardless of the company.

This doesn't make Palantir a bad investment, but such a high valuation means that investors have priced a lot of growth into the stock, and anything short of meeting these lofty expectations could result in a sharp pullback.