Palantir rides high on greed and fear — but mostly fear

{"text":[[{"start":4.519,"text":"Palantir is odd, as companies go — and it wears its weirdness on its sleeve. What other giant listed company’s chief executive would describe its products as “powerful as fuck”, use earnings calls to criticise elites who smugly eat vegetables, or contend that big AI labs are data thieves that believe customers “deserve to be colonised”?"}],[{"start":24.6,"text":"Such theatre aside, Palantir is also odd in a financial sense. Its growth is prodigious — analysts at Morningstar brand it “ostentatious”. Demand for its services, which combine software with consultancy to help clients make sense of their diffuse data, is expanding at a rapid pace: in the US, revenue from business customers rose 149 per cent year on year in the second quarter, while government revenue increased by 90 per cent."}],[{"start":52.342,"text":"The company doesn’t shy away from pointing out how good this is. Chief executive Alex Karp trumpeted his company’s quarterly performance on Monday by talking about the “rule of 40”, a number made from adding its revenue growth to its operating margin. Silicon Valley lore holds that companies that score 40 are doing pretty well. Palantir hit 155. The average S&P 500 company manages 30, Lex calculates."}],[{"start":null,"text":"

"}],[{"start":78.789,"text":"The secret, as with most things in finance, is greed and fear. The former shows up in the fact that Palantir’s products really work, so customers want more of them. Existing clients spent 57 per cent more in the second quarter than they did a year earlier."}],[{"start":94.403,"text":"But Karp is cranking up the anxiety dial too. As a tool of war, Palantir’s defence business does well when the world is fearful. Businesses, too, should be afraid, he argues, because AI giants — presumably Anthropic and OpenAI — are growing fat on customers’ proprietary intel. Palantir, by contrast, styles itself as a security guard keeping predatory model-makers at bay."}],[{"start":117.85,"text":"This isn’t a bad marketing tactic. Palantir’s shares have been sold off amid concerns that AI upstarts will rob it of its uniqueness. Until Monday’s close, investors had knocked $122bn off the company’s market capitalisation this year, a loss exceeded by just three other S&P 500 companies: Tesla, Meta Platforms and Oracle. On Tuesday, the stock rebounded over 25 per cent, but is still below where it started 2026."}],[{"start":146.08,"text":"Even so, Palantir’s valuation represents more fear than greed: specifically, the fear of missing out. Its $375bn enterprise value is equivalent to 60 times its trailing revenue. Microsoft, for comparison, trades at 10 times. Accenture, a consultant exposed to AI disruption in a major way, trades at just over 1 times revenue."}],[{"start":166.918,"text":"That premium requires belief that Palantir’s unconventional growth can continue for years to come. Assume its multiple eventually falls into line with Microsoft’s over a decade. With a 10 per cent cost of capital, it’s as if investors expect Palantir’s revenue to increase 15-fold by 2036, Lex reckons. There’s odd, and then there’s downright far-fetched."}],[{"start":191.85,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1786279166_7271.mp3"}