They say it is the future. They say it will change everything. But here we are, staring at a company trading at eighty times its sales with no path in sight to justify it. This is not a minor exaggeration. It is a full-blown hallucination on a national stage.
Palantir is not solving world hunger. It is not building colonies on Jupiter. It is not printing gold bars with machine learning. It is selling data analytics software to the government and a handful of corporate clients. And for that, the market is handing it a valuation that belongs to a company minting money like Apple or Microsoft. But it is not Apple. It is not Microsoft. It is not even close.
Last year, Palantir generated just over two billion dollars in revenue. The market is valuing each dollar of that revenue at eighty dollars. That is a premium reserved for miracles, not for software sold through federal procurement channels. Federal contracts are slow. They are uncertain. They come with margin pressure, bureaucracy, audits and delays. The private sector side is no better. Companies like Amazon, Microsoft and Google are fighting in the same AI trench with better tools, deeper reach and global infrastructure Palantir simply does not have.
Let us look at the numbers. The trailing twelve-month revenue stands at about two point six billion. Multiply that by eighty and you get two hundred billion dollars. That is the kind of valuation the market is implying. But the current market cap is around fifty billion. So even at this insane multiple, the market is already pricing in four to five years of massive uninterrupted growth as if nothing can go wrong.
Palantir’s quarterly growth rate has been hovering around twenty percent year over year. That is decent but not breathtaking. It is nowhere near what is needed to sustain this kind of multiple. To close the valuation gap, the company would need to double revenue every two years while maintaining profit margins and fending off competitors from every direction. Not likely.
Let us also not forget how much of the so-called profit is based on stock-based compensation. Adjusted profits are just numbers reshuffled to look prettier. The truth is Palantir still struggles to show clean earnings under standard accounting rules. If you subtract the heavy dilution from employee stock rewards, the profitability vanishes.
Wall Street has seen this movie before. We saw it in the dotcom bubble. We saw it with Snowflake. We saw it with Zoom. A great story, a charismatic CEO, and retail money chasing the dream. But math always wins. Sooner or later, the stock price returns to the reality of fundamentals.
There is nothing wrong with Palantir building good products. But there is something deeply wrong with pretending a two billion dollar software business is worth one hundred billion dollars or more. No contract, no AI rollout, no press release is going to bridge this gap unless the laws of finance are rewritten.
This valuation has no floor. When the music stops, there is no cushion.
It is a bet on fantasy disguised as a data company.
You are not investing at eighty times sales. You are gambling on a miracle.