Core Viewpoint - Palantir's performance remains strong as U.S. businesses increasingly invest in AI software to enhance operational efficiency, but the company's current stock valuation is considered unsustainable, reminiscent of post-2000 internet bubble stocks. Analysts hold a bearish view on the stock, suggesting that investors are engaging in a risky game [1]. Financial Performance - In Q2 2025, Palantir's revenue surged by 48%, surpassing $1 billion for the first time, with U.S. commercial revenue growing an impressive 93%, although June's quarterly sales reached only $306 million [2]. - The total contract value for Palantir this quarter reached $2.3 billion, with an annual contract value of $684 million and an average contract duration of three years, indicating strong future demand [5]. Growth Potential and Challenges - Palantir's high growth rate is attributed to its early-stage position in the AI business, but as revenue scales to $5-10 billion, growth is expected to slow down. The CEO noted that the company has just emerged from a "virtual startup phase" after over 20 years of development [3][4]. - The company reported a significant increase in U.S. commercial accounts, which rose by 64% to 485 accounts [6]. Valuation Concerns - Palantir's stock valuation is deemed excessive, with stock-based compensation leading to a market cap increase of nearly $28 billion, while projected revenue is only expected to reach $4.15 billion. This discrepancy highlights a valuation that is seven times the revenue target, exceeding that of large enterprise software companies like Salesforce [5][9]. - The diluted share count increased by 148 million over the past year, resulting in a diluted market cap of $474 billion, while analysts predict revenue will only exceed $40 billion by 2033 [9]. Market Dynamics - The stock price is currently 12 times the revenue target for eight years out, and even when considering high profit margins, the stock price reflects a 30 times multiple on projected earnings per share of $6.10 by 2033 [10]. - Palantir's operational profit margin is inflated due to a significant gap between GAAP and adjusted profit margins, raising concerns about the sustainability of such high margins in a normal tech company [9]. Employee Incentives and Risks - The high level of stock-based compensation may limit future appreciation opportunities for employees, potentially leading to a "semi-retirement" scenario where employees lose motivation due to stock value increases [14]. - Despite the risks, the stock could continue to rise, with potential for significant price increases, but any business setbacks could lead to drastic declines in stock value [15].