Core Viewpoint - Palantir Technologies is currently valued at approximately $370 billion, making it one of the most richly valued software companies in history, but this valuation raises questions about its sustainability and growth potential [1][3]. Valuation - Palantir is trading at around 100 times its sales and 200 times its earnings, which suggests an extremely high valuation compared to traditional software multiples [5]. - To justify its current price at a mature software multiple of 10 times sales, Palantir would need to achieve $38 billion in revenue, while it currently generates only $4.4 billion, indicating a significant revenue gap of $34 billion [6]. Market Limitations - Palantir's revenue growth is effectively capped, as it is likely to derive approximately 80% of its revenue from the U.S. market, limiting its international expansion potential [7]. - There are only about 4,000 companies in the U.S. with revenues exceeding $500 million, which are the minimum size to afford Palantir's services, raising concerns about the company's ability to find new revenue sources [8]. Competitive Position - To justify the current stock price, Palantir would need to become the primary operating system for 75% of major U.S. corporations, charging them an average of $10 million annually, which is viewed as an unrealistic expectation [10]. - Unlike Microsoft, which benefits from external network effects, Palantir lacks a similar competitive advantage, making widespread adoption more challenging [11]. Financial Performance - Palantir generates approximately $700 million in free cash flow, but at the current valuation, it would take around 500 years to recoup the $370 billion investment through profits alone [12]. Geopolitical Constraints - CEO Alex Karp has stated that Palantir will not sell its services to countries like China and Russia, which eliminates a significant portion of the global market, accounting for about 30% of global GDP [13]. Revenue Scenarios - If Palantir captures 25% of its potential market and charges an average of $2 million per year, it would only generate $2 billion in new revenue, leading to a potential stock price crash of 80% [14]. - In a more optimistic scenario, capturing 75% of the market at $10 million per year would meet revenue targets, but this scenario is considered highly unlikely [14]. Adoption Challenges - Palantir's business model does not create a "viral loop" for customer adoption, meaning it must win every customer based on merit, making it difficult to achieve significant market penetration [16]. Conclusion - While Palantir is recognized as a valuable company with critical applications, its current stock price reflects an expectation of having already dominated the Western economy, which may not be justified [17].