Palantir CEO questions Wall Street’s approach to AI investment

Bless you guys. It’s hard to see the reality when you’re getting rich on something that’s not actually working the way you think it is.” He suggested a significant market exists for Palantir’s services, emphasizing that it surpasses the company’s current capacity.

Karp’s comments focused on identifying which companies will ultimately profit from AI advancements, criticizing those who “resell tokens” as a form of revenue. He acknowledged and praised the model makers, describing them as partners in a commercially symbiotic relationship.

Chief Technology Officer Shyam Sankar elaborated on Karp’s perspective, explaining Palantir’s focus on transforming AI tokens into tangible economic value. Sankar positioned Palantir as a “diffusion layer,” emphasizing the importance of integrating AI into existing workflows to generate a return on investment. Palantir’s Foundry, Ontology, and AIP platforms facilitate this integration.

Palantir’s Q3 financial results demonstrated strong performance. Revenue reached $2.313 billion, a 96% increase year-over-year. Adjusted operating margin improved to 62% from 51% the previous year. Net dollar retention rose to 165%, an 800 basis point increase. U.S. commercial revenue ($984 million) surpassed U.S. government revenue for the first time, and a pilot program with an industrial materials company resulted in a $29 million annual contract value deal after an initial $3 million investment. Full-year revenue guidance was raised to between $8.53 billion and $8.534 billion.

Despite the positive results, Palantir’s stock price dipped, trading at $173.11 midday, down 12.94% over the past week and 13.65% over the past year. Analysts cited slowing total contract value growth and increased stock-based compensation as contributing factors. With a market capitalization of approximately $396.5 billion and a trailing P/E ratio near 252, Palantir faces significant pressure to deliver. Total remaining deal value increased 55% to $13.4 billion, and future performance will be closely watched against the fourth-quarter revenue guidance of $2.649 to $2.653 billion.