Feb 3, 2025
Stock Review
Palantir - The New Computing Backbone of the World
Palantir - The New Computing Backbone of the World
Since November 1st, Palantir has been part of our concentrated US-Equities Portfolio, which selects stocks with strong momentum using a data-driven approach. Today, we take a closer look at the company, which has experienced a massive run-up over the past year.
To many, Palantir may seem like a mysterious company, led by an eccentric CEO and an almost cult-like company culture. Its business model can also be tricky to fully understand. If you start reading up on Palantir, you’ll quickly come across buzzwords like ontology, inference, and digital twins, which might sound confusing at first (don’t worry, we’ll explain them later). On top of that, the company’s co-founder and CEO Alex Karp has claimed that Palantir’s software is currently as powerful as nuclear weapons were in World War II and may become the most important software and AI company in the world. But what makes Palantir so special? And how did it grow into the company it is today? Let’s start from the beginning.
Palantir’s History
Palantir was founded in 2003 by Alex Karp, Peter Thiel and three others. Interestingly, its name is inspired by The Lord of the Rings, where the palantíri stones allowed users to communicate and see events in other parts of the world. Similarly, Palantir’s software enables organizations to uncover hidden patterns in vast datasets, thereby providing valuable insights that enhance decision-making. In its early years, Palantir focused primarily on governments, providing its technology for defense and counterterrorism efforts. In fact, in early 2021, it was even awarded a five-year contract to serve as “the operating platform to safeguard America’s nuclear stockpile” – a critical role in securing some of the most powerful weapons of the West. Over time, the company expanded beyond government work, offering its advanced analytics software to commercial clients. Today, approximately half of its revenue comes from government contracts, with the rest generated from commercial clients.
In September 2020, amid the COVID-10 pandemic, Palantir went public. Fast forward to January 2025, and its stock is trading at an astonishing price-to-earnings (P/E) ratio of 401. Yes, that’s right – a P/E of 401. Clearly, investors have high expectations for Palantir’s future. But what makes this company so valuable?
What does Palantir actually do?
At its core, Palantir is a data analytics powerhouse. It builds AI-driven platforms that help organizations across industries unlock their full potential of their data, thereby enhancing decision-making, optimizing operations, and uncovering hidden insights.
Palantir’s technology is used in a wide range of sectors, including government and defense, healthcare, financial services, energy, manufacturing, aviation, transportation, and telecommunications. With offices in over 25 countries – it even has an office in Canton Schwyz, Switzerland – Palantir’s reach extends far beyond Silicon Valley. By integrating and analyzing vast amounts of raw data, Palantir’s platforms provide real-time intelligence, making them indispensable for organizations dealing with complex, high-stakes decisions.
The company currently offers three core products:
Foundry – A platform designed for commercial enterprises, helping businesses identify patterns and make data-driven decisions.
Gotham – A government-focused version of Foundry, used primarily for intelligence, defense, and national security applications.
Apollo – A software deployment tool that allows clients to run Foundry and Gotham on any infrastructure, whether cloud-based or on-premise.
Palantir isn’t just a software company—it’s an intelligence engine that turns raw data into actionable insights. And as AI continues to reshape industries, Palantir’s role in the global data economy is only growing.
Aviation – An example of Palantir’s Potential
The core problem Palantir tackles is information fragmentation. In both government and corporate settings, vast amounts of data exist but they are usually separated in silos and are rarely utilized efficiently. Palantir’s platforms unify and analyze these data streams, allowing organizations to:
Enhance decision-making with predictive analytics and AI-driven insights.
Reduce operational inefficiencies by identifying bottlenecks and optimizing workflows.
Automate complex workflows, increasing productivity while cutting costs.
A prime example of Palantir’s technological edge is its partnership with Airbus to develop Skywise, a data-driven platform that revolutionizes airline operations. By consolidating data from aircraft sensors, maintenance logs, and flights schedules, Skywise helps airlines predict and prevent mechanical failures, optimize fuel consumption and streamline fleet management. Interestingly, Microsoft and Boeing launched a competitive platform nearly a year earlier, yet today 65% of the Boeing’s fleet operates within Skywise. With over 100 airlines and 9’000 aircraft connected globally, Skywise has become the industry’s dominant aviation analytics platform by breaking down data silos and enabling real-time collaboration among stakeholders.
Palantir’s Moat and Lack of Competition
One of Palantir’s biggest advantages is that it essentially has no true competitors. Its most formidable rival isn’t another software company, but rather the internal IT departments of the organizations it serves. While big tech companies like Microsoft or Google could theoretically develop similar solutions, Palantir’s head start, deep expertise, and cultural focus on solving complex data problems make it difficult to replicate. With over $3 billion invested in R&D over the last 15 years, Palantir has built an almost insurmountable lead.
Furthermore, Palantir’s benefits from powerful network effect – the more organizations that use its software, the smarter and more valuable the platform becomes. As it continues to expand across industries, Palantir is positioning itself as an indispensable layer of enterprise computing, much like Google did with search and Amazon with cloud services.
Conclusion
Palantir isn’t just another software company—it’s building the backbone of enterprise AI and data-driven decision-making. Its technology is already so deeply embedded in critical industries that it will be incredibly difficult for competitors to displace. While challenges still remain, Palantir’s ability to scale, combined with the rising demand for AI-driven insights, puts it on track to become a trillion-dollar powerhouse in the years ahead.
At NDT Capital Partners, we develop robust, rule-based investment strategies with clear principles for long-term growth. If you’d like to learn more about how we identify stocks like Palantir, we’d be delighted to discuss further.
Explanations of terms:
Ontology – Ontology is a core concept in Palantir’s software and refers to a structural and unified framework for organizing and integrating data across an organization. It helps users to make sense of complex and disparate datasets.
Inference – Inference refers to the process of turning raw data into useful, actionable insights. Palantir’s software doesn’t just store and organize data, it helps its users infer patterns, detect anomalies, and predict outcomes based on past information.
Digital Twins – A digital twin is a virtual model that represents a real-world object, system, or process. This virtual model allows companies to simulate different scenarios – such as equipment failure, supply chain disruptions, or changes in demand, without affecting the real factory.
Sources:
Karp, A. C. (2023, July 25). Our Oppenheimer Moment: The Creation of A.I. Weapons. The New York Times. https://www.nytimes.com/2023/07/25/opinion/karp-palantir-artificial-intelligence.html
Linears, A. (2022, March 10). Palantir – The most important company in the West. Investmentideas. https://www.investmentideas.io/p/palantir-the-most-important-company
Palantir (2023, July 14). Palantir CEO Alex Karp + Joe Lonsdale | American Optimist [Video]. YouTube. https://www.youtube.com/watch?v=BqW5fk6x858
Palantir Technologies Inc. (2023). Annual report. Palantir Technologies Inc. https://www.sec.gov/Archives/edgar/data/1321655/000132165524000022/pltr-20231231.htm
Palantir Technologies Inc. (2024, November 4). Q3 2024 business update. Palantir Technologies Inc. https://investors.palantir.com/files/Palantir%20Q3%202024%20Business%20Update.pdf
Palantir Picture. https://ch.marketscreener.com/kurs/aktie/PALANTIR-TECHNOLOGIES-INC-113108869/news/Palantir-prognostiziert-fur-2025-einen-uber-den-Schatzungen-liegenden-Umsatz-aufgrund-der-Starke-48942445/
Palantir - The New Computing Backbone of the World
Since November 1st, Palantir has been part of our concentrated US-Equities Portfolio, which selects stocks with strong momentum using a data-driven approach. Today, we take a closer look at the company, which has experienced a massive run-up over the past year.
To many, Palantir may seem like a mysterious company, led by an eccentric CEO and an almost cult-like company culture. Its business model can also be tricky to fully understand. If you start reading up on Palantir, you’ll quickly come across buzzwords like ontology, inference, and digital twins, which might sound confusing at first (don’t worry, we’ll explain them later). On top of that, the company’s co-founder and CEO Alex Karp has claimed that Palantir’s software is currently as powerful as nuclear weapons were in World War II and may become the most important software and AI company in the world. But what makes Palantir so special? And how did it grow into the company it is today? Let’s start from the beginning.
Palantir’s History
Palantir was founded in 2003 by Alex Karp, Peter Thiel and three others. Interestingly, its name is inspired by The Lord of the Rings, where the palantíri stones allowed users to communicate and see events in other parts of the world. Similarly, Palantir’s software enables organizations to uncover hidden patterns in vast datasets, thereby providing valuable insights that enhance decision-making. In its early years, Palantir focused primarily on governments, providing its technology for defense and counterterrorism efforts. In fact, in early 2021, it was even awarded a five-year contract to serve as “the operating platform to safeguard America’s nuclear stockpile” – a critical role in securing some of the most powerful weapons of the West. Over time, the company expanded beyond government work, offering its advanced analytics software to commercial clients. Today, approximately half of its revenue comes from government contracts, with the rest generated from commercial clients.
In September 2020, amid the COVID-10 pandemic, Palantir went public. Fast forward to January 2025, and its stock is trading at an astonishing price-to-earnings (P/E) ratio of 401. Yes, that’s right – a P/E of 401. Clearly, investors have high expectations for Palantir’s future. But what makes this company so valuable?
What does Palantir actually do?
At its core, Palantir is a data analytics powerhouse. It builds AI-driven platforms that help organizations across industries unlock their full potential of their data, thereby enhancing decision-making, optimizing operations, and uncovering hidden insights.
Palantir’s technology is used in a wide range of sectors, including government and defense, healthcare, financial services, energy, manufacturing, aviation, transportation, and telecommunications. With offices in over 25 countries – it even has an office in Canton Schwyz, Switzerland – Palantir’s reach extends far beyond Silicon Valley. By integrating and analyzing vast amounts of raw data, Palantir’s platforms provide real-time intelligence, making them indispensable for organizations dealing with complex, high-stakes decisions.
The company currently offers three core products:
Foundry – A platform designed for commercial enterprises, helping businesses identify patterns and make data-driven decisions.
Gotham – A government-focused version of Foundry, used primarily for intelligence, defense, and national security applications.
Apollo – A software deployment tool that allows clients to run Foundry and Gotham on any infrastructure, whether cloud-based or on-premise.
Palantir isn’t just a software company—it’s an intelligence engine that turns raw data into actionable insights. And as AI continues to reshape industries, Palantir’s role in the global data economy is only growing.
Aviation – An example of Palantir’s Potential
The core problem Palantir tackles is information fragmentation. In both government and corporate settings, vast amounts of data exist but they are usually separated in silos and are rarely utilized efficiently. Palantir’s platforms unify and analyze these data streams, allowing organizations to:
Enhance decision-making with predictive analytics and AI-driven insights.
Reduce operational inefficiencies by identifying bottlenecks and optimizing workflows.
Automate complex workflows, increasing productivity while cutting costs.
A prime example of Palantir’s technological edge is its partnership with Airbus to develop Skywise, a data-driven platform that revolutionizes airline operations. By consolidating data from aircraft sensors, maintenance logs, and flights schedules, Skywise helps airlines predict and prevent mechanical failures, optimize fuel consumption and streamline fleet management. Interestingly, Microsoft and Boeing launched a competitive platform nearly a year earlier, yet today 65% of the Boeing’s fleet operates within Skywise. With over 100 airlines and 9’000 aircraft connected globally, Skywise has become the industry’s dominant aviation analytics platform by breaking down data silos and enabling real-time collaboration among stakeholders.
Palantir’s Moat and Lack of Competition
One of Palantir’s biggest advantages is that it essentially has no true competitors. Its most formidable rival isn’t another software company, but rather the internal IT departments of the organizations it serves. While big tech companies like Microsoft or Google could theoretically develop similar solutions, Palantir’s head start, deep expertise, and cultural focus on solving complex data problems make it difficult to replicate. With over $3 billion invested in R&D over the last 15 years, Palantir has built an almost insurmountable lead.
Furthermore, Palantir’s benefits from powerful network effect – the more organizations that use its software, the smarter and more valuable the platform becomes. As it continues to expand across industries, Palantir is positioning itself as an indispensable layer of enterprise computing, much like Google did with search and Amazon with cloud services.
Conclusion
Palantir isn’t just another software company—it’s building the backbone of enterprise AI and data-driven decision-making. Its technology is already so deeply embedded in critical industries that it will be incredibly difficult for competitors to displace. While challenges still remain, Palantir’s ability to scale, combined with the rising demand for AI-driven insights, puts it on track to become a trillion-dollar powerhouse in the years ahead.
At NDT Capital Partners, we develop robust, rule-based investment strategies with clear principles for long-term growth. If you’d like to learn more about how we identify stocks like Palantir, we’d be delighted to discuss further.
Explanations of terms:
Ontology – Ontology is a core concept in Palantir’s software and refers to a structural and unified framework for organizing and integrating data across an organization. It helps users to make sense of complex and disparate datasets.
Inference – Inference refers to the process of turning raw data into useful, actionable insights. Palantir’s software doesn’t just store and organize data, it helps its users infer patterns, detect anomalies, and predict outcomes based on past information.
Digital Twins – A digital twin is a virtual model that represents a real-world object, system, or process. This virtual model allows companies to simulate different scenarios – such as equipment failure, supply chain disruptions, or changes in demand, without affecting the real factory.
Sources:
Karp, A. C. (2023, July 25). Our Oppenheimer Moment: The Creation of A.I. Weapons. The New York Times. https://www.nytimes.com/2023/07/25/opinion/karp-palantir-artificial-intelligence.html
Linears, A. (2022, March 10). Palantir – The most important company in the West. Investmentideas. https://www.investmentideas.io/p/palantir-the-most-important-company
Palantir (2023, July 14). Palantir CEO Alex Karp + Joe Lonsdale | American Optimist [Video]. YouTube. https://www.youtube.com/watch?v=BqW5fk6x858
Palantir Technologies Inc. (2023). Annual report. Palantir Technologies Inc. https://www.sec.gov/Archives/edgar/data/1321655/000132165524000022/pltr-20231231.htm
Palantir Technologies Inc. (2024, November 4). Q3 2024 business update. Palantir Technologies Inc. https://investors.palantir.com/files/Palantir%20Q3%202024%20Business%20Update.pdf
Palantir Picture. https://ch.marketscreener.com/kurs/aktie/PALANTIR-TECHNOLOGIES-INC-113108869/news/Palantir-prognostiziert-fur-2025-einen-uber-den-Schatzungen-liegenden-Umsatz-aufgrund-der-Starke-48942445/