Copyright ibtimes
Palantir Technologies has solidified its position as a leader in defence-focused artificial intelligence, driven by the rapid expansion of its flagship AI Platform (AIP). After becoming a US Department of Defence contractor in 2024, Palantir secured billion-dollar contracts that have propelled its growth and made it one of the hottest AI stocks on Wall Street. Currently trading at $207.18 per share, Palantir (ticker: PLTR) has experienced a staggering year-to-date gain of nearly 174%. Over the past three years, its total return has surpassed 2,420%, underlining the immense investor confidence in its AI-driven future. The surge is primarily attributed to its strategic focus on AI and its positioning within the defence industry. AI: The Catalyst Behind the Stock's Rise AI is the foundation of Palantir's rapid ascent. The company's software powers real-time, AI-driven decision-making for critical government and commercial operations across the West. Recently, Palantir added three more platforms to its core product, AIP, but CEO Alex Karp remains confident there is still significant room for growth. Impressive Q3 2025 Results Palantir's third-quarter results for 2025 showcase its robust growth. Revenues hit $1.2 billion—a 63% increase year-over-year. Net income rose 40% to $475.6 million, while adjusted free cash flow reached $539.9 million, up 46%. These figures highlight the company's expanding profitability and cash-generating capacity. Further, Palantir's 'Rule of 40' score stands at an impressive 114%. This key metric combines growth rate and profit margin to assess SaaS companies' health, with a score above 40 indicating strong performance. The company's total contract value (TCV) closed at a record $2.76 billion, a 151% increase from the previous year, with most revenues derived from the US government and commercial sectors. In his shareholder letter dated 3 November 2025, CEO Alex Karp noted, 'It is worth remembering that the business is now producing more profit in a single quarter than it did in revenue not long ago.' Karp also emphasised the democratization of investment returns through Palantir's growth: 'The reality is that Palantir has made it possible for retail investors to achieve rates of return previously limited to the most successful venture capitalists in Palo Alto. And we have done so through authentic and substantive growth.' Leading the Global Defence AI Arms Race Palantir's strategic moves extend beyond the US. In September 2025, the UK government awarded Palantir a £750 million military AI contract, integrating its technology into the British Armed Forces. The UK will utilise Palantir's software to upgrade AI capabilities in decision-making, military planning, and targeting systems, with London poised to become its European defence hub. Additionally, Palantir formed a multi-year partnership with Lumen Technologies on 23 October 2025, valued at $200 million. This collaboration aims to integrate Palantir's AI software with Lumen's network infrastructure to accelerate enterprise AI adoption. Lumen, a telecommunications giant and rising tech stock, signifies Palantir's focus on broadening its enterprise footprint. Karp highlighted the significance of this partnership, stating, 'It confirms that Palantir is in an AI arms race with competitors. It's a very large deal, and we're very serious about it.' Other notable strategic alliances include collaborations with Snowflake for enterprise AI and analytics, and OneMedNet to advance healthcare AI and data analytics. Bright Outlook for 2025 and Beyond Looking ahead, Palantir projects total sales of around $4.4 billion in fiscal 2025. The company expects free cash flow to range between $1.9 billion and $2.1 billion, reinforcing its position in the defence industry and its dominance in AI. With virtually no serious competition in the defence AI race at present, Palantir's prospects remain bullish. Its entrenched relationships with the Pentagon and international governments, coupled with its expanding AI capabilities, position it as a key player in the global military technology landscape. Palantir's aggressive expansion into AI-driven defence technology and its strategic international contracts make it one of the most compelling stocks to watch in the AI and defence sectors. The company's ability to innovate and secure high-profile government partnerships suggests that its growth trajectory remains firmly on course. Disclaimer: Our digital media content is for informational purposes only and does not constitute investment advice. Please conduct your own analysis or seek professional guidance before investing. Remember, investments are subject to market risks, and past performance does not guarantee future results. Originally published on IBTimes UK
