Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTJohn Ballard, The Motley FoolTue, August 11, 2026 at 5:50 PM GMT+2 4 min readShares of Palantir Technologies (NASDAQ: PLTR) are down 0.5% year-to-date, underperforming the Nasdaq Composite's roughly 14.4% gain. Much of that underperformance reflects the stock's lofty valuation coming into the year -- not a collapse in demand. In fact, Palantir continues to see explosive growth for its artificial intelligence (AI) platform.Revenue growth has accelerated in every quarter since mid-2023, and the most recent period showed 93% year-over-year growth. With the stock rebounding after strong earnings, the question is whether it is still worth buying.Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »Image source: Palantir Technologies.Palantir's security edge is driving outsize growthInvestors are bidding up shares after earnings because Palantir is demonstrating that it could become one of the world's leading software companies with high profit margins. Palantir credited the quarter's growth to its focus on security and the protection of customer data. As businesses feed more data into AI models, retaining control of sensitive information has become a core requirement. CEO Alex Karp summed it up this way: "Their competitive advantage should never become the training data for future models."Security has become a key selling point for Palantir's AI tools. In the second quarter, U.S. commercial revenue jumped 149% year over year, while government revenue still grew by a rapid 90%. That momentum shows major U.S. companies are coming to Palantir in a mass wave.Large enterprises and government agencies trust Palantir with their most sensitive data -- and are willing to pay for it. Palantir posted a 55% net profit margin in the quarter and, over the last year, generated more than $3 billion in net income on about $6.2 billion in revenue.Competition and valuation still weigh on the stockEven though other big players like Databricks and Snowflake offer AI-driven data tools, they are not the same as Palantir's. Beyond security, Palantir differentiates itself by building a digital representation of an organization's operations, with engineers working closely alongside customers to solve complex, real-world problems. That hands-on approach is a big reason governments rely on Palantir for mission-critical defense programs.The bigger issue is valuation. Palantir trades at roughly 50 times estimated 2026 revenue and about 108 times forward earnings. Even if revenue and earnings doubled over the next year, the stock would still carry a sizable premium over most growth peers.Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info