Palantir's Rise: 20x Returns and a Bet on America's Future

Written by David & Liam

On August 8, 2025, Palantir Technologies (NASDAQ: PLTR) shares hit $187.99, pushing the company's market capitalization beyond $443 billion, surpassing the combined worth of three defense industry giants: Lockheed Martin, Raytheon, and Northrop Grumman.

Since its direct listing at $10 in September 2020, PLTR has rebounded from a low of $5.92, delivering a staggering 31x return. Even when calculated from its listing price, the gain approaches nearly 19x.

From the start of 2025 alone, PLTR has soared another 145%.

This AI data company doesn't manufacture chips, train large models, or produce consumer products. Yet its client roster reads like a cast list from Mission Impossible: the CIA, FBI, NSA, Pentagon, Israel Defense Forces, and Britain's MI5.

Even more peculiar is the valuation. PLTR's forward price-to-earnings ratio reaches an extraordinary 245x, while the industry average sits at just 24x. By comparison, Nvidia, which some label an "AI bubble stock," trades at merely 35x.

Where does such conviction originate?

This data company, founded by PayPal Mafia Peter Thiel and once backed by Chinese celebrity heir Wang Sicong, was formerly scorned by Silicon Valley as an "evil company." Now the firm has transformed into the AI era's most sought-after star, representing a stock embodying American national fortune.

Times have changed.

Born in 9/11's Shadow

On September 11, 2001, the Twin Towers collapsed, permanently transforming America's security paradigm.

In Silicon Valley, Peter Thiel, the young billionaire who had just cashed out $1 billion from PayPal, pondered a different question: Could the methods PayPal used to combat transaction fraud be extended to other areas, like fighting terrorism?

At that time, they had constructed the world's most sophisticated commercial anti-fraud system, analyzing transaction patterns to identify anomalous behavior. What if the same logic applied to national security?

However, Thiel required someone exceptional to lead this venture and realize the concept.

He recalled his Stanford Law School classmate, Alex Karp.

Karp was Silicon Valley's most unlikely CEO. He studied philosophy at Haverford College, earned a law doctorate at Stanford, then pursued a PhD in neoclassical social theory at Goethe University Frankfurt, writing his dissertation on Aggression in the Lifeworld.

In 2004, Thiel officially appointed Karp as CEO.

That same year, they assembled an extraordinary founding team: 24-year-old Stanford prodigy Joe Lonsdale, Thiel's Stanford roommate Stephen Cohen, and PayPal engineer Nathan Gettings, who had developed PayPal's anti-fraud system prototype.

The company was named "Palantir," derived from the "seeing stones" in Tolkien's Lord of the Rings, magical orbs capable of penetrating time and space to reveal all secrets. In the novel, control of the Palantír meant control of information itself.

Interestingly, the company even named its offices after Middle-earth locations: Palo Alto became "The Shire," McLean, Virginia became "Rivendell," and Washington, D.C. became "Minas Tirith."

The startup capital proved equally unconventional: $2 million from the CIA's venture arm In-Q-Tel and $30 million from Thiel himself and his Founders Fund.

Over the following decade, Palantir raised over $3 billion from a diverse range of investors, including America's top venture capital firms and some controversial figures. Notably, in 2014, Chinese celebrity heir Wang Sicong invested $4 million through his Prometheus Capital at a company valuation of approximately $9 billion.

Their mission became crystal clear in post-9/11 America.

As CEO Karp later put it, Palantir's work focused on "the finding of hidden things," specifically the next potential terrorist attack.

Tracking Bin Laden

From 2003 to 2006, Palantir all but vanished from public view.

No product launches, no media coverage, not even a formal office sign. Engineers worked inside an inconspicuous building, developing software codenamed "Gotham" for U.S. intelligence agencies.

Yes, it was named after the same city that Batman protects.

By 2010 in Afghanistan, U.S. forces faced an invisible enemy. That year alone, over 200 American soldiers died from roadside bombs (IEDs), more than the previous three years combined.

This is where Gotham proved its value, connecting seemingly unrelated pieces of information to create a complete picture:

A local man wearing a purple hat triggered a system alert and was flagged as anomalous because purple was extremely rare in the local culture. By tracking this distinctive feature and cross-referencing it with mobile phone signals, movement patterns, and social network data, authorities identified him as the operative responsible for planting the explosives.

Another widely known achievement came in 2011 with the killing of Osama bin Laden.

While never officially confirmed, multiple sources suggest that Palantir played a crucial role in the operation. In The Finish, Mark Bowden's book chronicling the hunt for bin Laden, he described Palantir as a "killer app in every sense of the word."

The Gotham system analyzed years of accumulated data: phone records, financial transactions, movement patterns, and social networks. This analysis ultimately led investigators to what appeared to be an ordinary compound.

The company that emerged from CIA funding had become one of the U.S. government's most powerful data weapons.

The Outcast of Silicon Valley

Government contracts are a double-edged sword.

For Palantir, reliance on government deals provided crucial early revenue but also branded the company with an indelible label: "the government company." This invisible shackle accompanied the firm throughout its entire commercialization process.

In 2009, Palantir first attempted to expand beyond the intelligence community. JPMorgan became its first major commercial client.

The bank used Palantir's technology for internal risk control, monitoring traders' emails, GPS locations, printing and downloading behaviors, and even analyzing phone call transcripts to detect potential improper trading.

In 2011, the company launched Foundry, its enterprise platform that consolidated sales, inventory, finance, and operations data into a unified analytics center, enabling more efficient cross-departmental data access. However, the system required deployment cycles lasting several months, with each project demanding nearly complete custom development, resulting in high costs and poor scalability.

Many clients praised the technology but were deterred by the expense and extended implementation timelines. By contrast, "lightweight" platforms such as Snowflake and Databricks gained greater market favor.

Amid these commercial setbacks, Palantir became embroiled in escalating political controversies: assisting the CIA in targeting WikiLeaks, participating in the PRISM surveillance program, and deploying facial recognition technology to track undocumented immigrants and street protesters.

In Silicon Valley's predominantly liberal culture, these activities branded Palantir as an "evil company" complicit in government overreach. Protesters repeatedly demonstrated outside Palantir's headquarters and at the personal residences of founders Thiel and Karp.

In 2020, just before going public, Palantir abandoned Silicon Valley for Denver, cutting all ties with its original home.

CEO Karp aired his frustrations in an open letter: "We provide software services to America's defense and intelligence agencies to protect national security, yet we face constant criticism. Meanwhile, internet companies that sell consumer data for advertising revenue operate without similar backlash."

That September, Palantir went public.

The media highlighted numerous concerns:

Seventeen years without profit: Palantir lost $580 million in 2019. The company even warned in its IPO filing that it might never achieve or maintain profitability.

Heavy dependence on government contracts: Government clients generated 53.5% of revenue in the first half of 2020, up from 45% the previous year.

Controversial corporate governance: SEC filings revealed that founders could unilaterally change voting rights at their discretion.

Shares opened at $10 on the first trading day. Two years later, the stock had fallen to $5.92.

To outsiders, this company appeared to offer little investment appeal. The firm relied heavily on government contracts, repeatedly failed at commercialization, showed no clear path to profitability after more than a decade in operation, and faced widespread condemnation throughout Silicon Valley.

Yet within just a few years, its market valuation surged past $400 billion, placing it among the world's most valuable technology companies.

How exactly did Palantir execute this dramatic transformation?

A Stunning Transformation

On November 30, 2022, ChatGPT launched and the entire world began discussing AI revolution.

For most enterprises, however, excitement quickly gave way to practical confusion: ChatGPT could compose poetry and engage in conversations, yet it couldn't comprehend their business data, understand their operational workflows, or integrate with their core systems.

This confusion became precisely Palantir's opportunity. Karp recognized what others had overlooked.

Less than five months after ChatGPT's launch, Palantir introduced AIP (Artificial Intelligence Platform).

AIP is essentially an AI agent platform that enables large language models to comprehend and operate with actual enterprise data. The system acquires knowledge of business workflows, grasps data architectures, and becomes familiar with operational logic, ultimately transforming into an AI workforce member that genuinely understands the organization.

The platform can analyze various internal enterprise systems including ERP platforms, CRM databases, and financial statements, while also executing actionable operations based on its analysis.

When asked which production line requires priority maintenance, the system avoids delivering generic equipment management theories like GPT. Instead, AIP provides specific recommendations grounded in real-time equipment status, maintenance history, and production schedules. The platform can even automatically generate maintenance work orders.

This exemplifies Palantir's core competency accumulated over many years: data integration and automated decision-making. Throughout the past two decades, the company has processed intelligence data for the CIA and FBI while analyzing battlefield information for the Pentagon.

Essentially, these efforts address one fundamental problem: transforming complex data into executable actions.

AI made complete automation achievable. While ChatGPT enabled everyone to communicate with AI, AIP empowered every enterprise to deploy AI as their workforce.

Financial results immediately demonstrated the impact of this transformation. During Q1 2023, before AIP's launch, Palantir's revenue growth declined to a historic low of 13%. However, once AIP became operational, growth rates began recovering robustly. Full-year 2024 revenue expanded by 23%.

The year 2025 witnessed explosive growth. Q1 revenue reached $884 million, representing a 39% year-over-year increase. Q2 revenue climbed to $1.01 billion, marking a 48% year-over-year surge.

More significantly, the client composition underwent a dramatic transformation. During Q4 2023, U.S. commercial customer count increased 55% year-over-year. By Q4 2024, total customer count reached 711, up 43% annually, with commercial revenue expanding 64% year-over-year, surpassing government revenue growth of 45%.

The company's long-criticized "government dependency" was finally being resolved. From Chevron to Airbus, from Santander Bank to Wenzel Spine, enterprises across diverse industries began adopting AIP.

With AIP, Palantir pulled off a remarkable reinvention from a government contractor and Silicon Valley outsider into one of AI's hottest companies.

The AI Arms Dealer

The AI revolution can unfold within a chat window or on actual battlefields.

In the defense sector, Palantir has already established itself as the Western world's "AI arms dealer."

In 2022, Palantir CEO Karp appeared in Kyiv to secure multiple cooperation agreements with the Ukrainian government.

Soon after, the Gotham system entered the battlefield. Commanders input target coordinates, algorithms automatically calculate firing parameters, and the system assigns missions to the "most cost-effective" weapons. Palantir became a direct participant in this modern conflict.

Palantir has now integrated into the U.S. and broader Western military-industrial complex.

After Google withdrew from Project Maven in 2019, Palantir immediately stepped in to assume this core Pentagon AI contract. Over subsequent years, contracts flowed continuously. In Q3 2024, Palantir secured a $218 million Space Force contract to develop integrated space-combat systems. In August 2025, the U.S. Army signed a 10-year, $10 billion agreement with Palantir.

In April 2025, a more symbolic milestone emerged: NATO officially procured Palantir's Maven Smart System, deploying the platform at Allied Command Operations to enhance multinational joint combat capabilities. This decision essentially established Palantir's technology as the de facto standard within Western military alliances.

Palantir CEO Karp articulated this power during a Washington Post interview: "The power of advanced algorithmic warfare systems is now so great that it equates to having tactical nuclear weapons against an adversary with only conventional ones."

In late 2024, Palantir released a promotional video on social media titled "Battles are won before they begin." This represented more than marketing; it constituted a declaration of intent.

The power behind Palantir extends far beyond Peter Thiel alone. Fellow PayPal Mafia member Elon Musk is collaborating with Peter Thiel to construct an unprecedented AI military-industrial ecosystem: Palantir delivers battlefield data analytics, SpaceX's Starlink network provides communications support, and X (formerly Twitter) dominates information warfare and influence operations.

This emerging military-industrial complex is redefining 21st-century warfare itself.

A Conviction Play on America

The explosive growth of AIP and consecutive wins on major defense contracts propelled Palantir's stock price into a meteoric rise: $20 in May 2023, $60 when joining the S&P 500 in November 2024, reaching an all-time high of $187.99 in August 2025. This represented nearly a 10-fold increase over just two years.

In the SaaS industry, a well-known "Rule of 40" evaluates company health: combining annual revenue growth rate with profit margin, any result exceeding 40% indicates an excellent company.

In Q1 2025, Palantir's figure reached 83%.

Then the retail investor army emerged.

Reddit's r/PLTR community assembled 108,000 "believers" who analyze every earnings report, interpret each CEO statement, and even create affectionate nicknames for the company. In their view, Palantir represents more than a software firm; it embodies an extension of America's national fortune.

For these retail investors, purchasing PLTR represents not a wager on a company, but on a world order. As long as the United States maintains global military dominance, Palantir will continue to prosper.

CEO Alex Karp has never concealed his political stance. He once stated publicly: "We have a consistently pro-Western view that the West has a superior way of living and organizing itself."

In his 2024 shareholder letter, Karp quoted historian Samuel Huntington: "The West won the world not by the superiority of its ideas or values or religion but rather by its superiority in applying organized violence."

In early 2025, Karp published a book titled "The Technological Republic."

In the book, he challenged Silicon Valley's technology companies: "Why do Silicon Valley firms focus solely on food delivery and social media, rather than national security?"

In his perspective, the responsibility of technology companies extends beyond generating profits to actively shaping the world's political order.

Such explicit technological nationalism remains rare in Silicon Valley. When Google withdrew from Project Maven due to employee protests, Palantir stepped in without hesitation, openly positioning itself as America's "digital arms dealer" in the AI arms race.

By August 2025, Palantir's market capitalization reached $443.55 billion, making it the world's 21st most valuable company.

What does this figure represent?

The valuation exceeded the combined market capitalizations of Lockheed Martin, Raytheon, and Northrop Grumman. These three traditional defense giants collectively were worth less than this software company employing fewer than 4,000 people.

A P/E ratio of 245 captures the essence of a conviction-driven stock: this isn't about cash flow or valuation models, but about investors holding a simple conviction that in an increasingly dangerous world, America needs Palantir.

Will the stock keep climbing? Nobody knows. But one thing is certain: in an era of shifting geopolitics, betting on "America's destiny" has become the most basic investment thesis, and Palantir has emerged as the perfect stock to play that theme.

It might be history's most expensive bet on American power, but for true believers, that's exactly the point.