The Next 2 Tech Winners Smart Investors Are Eyeing

Core Insights - Palantir Technologies has experienced significant growth, with Q4 revenue increasing 70% year-over-year (YOY) to $1.4 billion, driven primarily by its U.S. business which accounted for 77% of total revenue and grew 93% YOY [2] - The company has diversified its revenue streams, with commercial revenue rising 82% YOY to $677 million, while government revenue increased 60% YOY to $730 million, indicating a successful expansion beyond government contracts [2] - Palantir's total contract value (TCV) reached a record $4.3 billion in the quarter, with remaining deal value for the year increasing 105% YOY to $11.2 billion, showcasing strong demand for its services [5] Financial Performance - The company's "Rule of 40" score, a metric combining growth and profitability, reached 127%, reflecting a balance between rapid expansion and strong profitability [1] - For the full year, revenue grew 56% to $4.475 billion, with adjusted free cash flow of $2.27 billion and a cash position of $7.2 billion at the end of the quarter [5] - Analysts project earnings to increase by 76% in 2026 and another 39% in 2027, indicating strong future growth potential [7] Strategic Initiatives - Palantir is applying lessons from commercial supply chains to enhance national security, as evidenced by a $448 million contract from the U.S. Navy to modernize shipbuilding supply chains [1] - The company is focusing on organic growth through direct customer connections rather than acquisitions, which is expected to drive continued momentum in the coming years [6] - The average target price for Palantir shares is $200.43, suggesting a potential upside of 51% from current levels, with a Street-high estimate of $260 indicating a possible 95% upside [7]