Palantir just landed another major U.S. Army order. Its AI business is growing at a remarkable pace. PwC is expanding its partnership with the company. Yet investors are still asking the same uncomfortable question: how much growth is already priced into the stock?
That is the interesting part of the Palantir story right now.
The company is clearly winning business. Its AI platform is gaining traction, its government relationships remain strong, and its revenue pipeline continues to expand.
But the stock has also moved incredibly fast.
Shares jumped 39% between the release of Palantir’s second-quarter results on August 3 and early September. At the same time, concerns around valuation and the quality of the company’s financials have become louder.
So the debate is no longer simply about whether Palantir is a good business.
It is about whether the business can grow fast enough to justify what investors are paying for it.
The Army Just Gave Palantir Another Big Vote of Confidence
On September 1, the U.S. Army moved Palantir’s Tactical Intelligence Targeting Access Node, or TITAN, into production.
Palantir received a $127 million delivery order, while Anduril received $65 million.
The initial order covers eight systems, with four Advanced and four Basic variants. They are expected to be delivered over 18 months, with the Army anticipating another order in fiscal 2027.
TITAN is important because this is not simply another experimental AI project.
The system is designed to bring together data from space, aerial and ground sensors and help soldiers make targeting decisions, particularly around long-range fires.
For Palantir, moving from experimentation to production matters.
A successful production program can lead to additional orders and strengthen the company’s position in future defense programs.
In other words, Palantir is not just selling the Army an AI concept. It is moving an actual system into deployment.
That is a meaningful milestone for the company.
But the Stock Didn’t Act Like It
Here is where the story gets interesting.
Despite the Army contract, Palantir shares fell roughly 6% the following day.
That reaction says something important about the stock.
The market already expects Palantir to win contracts, grow quickly and expand its AI business. A $127 million order is positive for the company, but investors are looking at the much bigger financial picture.
When a company trades at an extremely demanding valuation, good news may not be enough.
The question becomes: is the company delivering results that are even better than what investors already expect?
That is a much higher bar.
Palantir’s Growth Is Hard to Ignore
The bullish argument is not based on hype alone.
Palantir’s second-quarter numbers were extremely strong.
- Revenue jumped 93% year over year to $1.94 billion
- Non-GAAP EPS increased 156% to $0.41
- Total contract value reached $3.37 billion, up 49%
- Remaining deal value climbed 83% to $13.1 billion
- The company added 200 new customers
- Net dollar retention reached 157%
Those numbers show two things happening at the same time.
Palantir is bringing in new customers, while existing customers are spending more.
That combination is particularly important for a software company.
A company that has to constantly find new customers just to maintain growth faces a very different situation from one where existing customers are expanding their spending.
Palantir currently has evidence of both.
The Revenue Pipeline Is Getting Bigger
One of the numbers worth watching closely is remaining deal value, or RDV.
Palantir reported RDV of $13.1 billion, up 83% from the same period a year earlier.
This represents contracts that have been signed but have not yet been fulfilled.
It does not mean Palantir will immediately recognize all of that money as revenue.
But it does provide visibility into future business.
The company has also raised its full-year revenue guidance to more than $8.15 billion, compared with its original expectation of around $7.19 billion at the beginning of the year.
That is a substantial improvement in expectations over a relatively short period.
The bull case is straightforward: if Palantir continues beating expectations, today’s valuation could eventually look more reasonable because the underlying earnings will catch up.
And That Is Exactly Where the Debate Starts
The problem is the price investors are paying today.
Palantir’s valuation has become one of the biggest points of disagreement surrounding the stock.
The company has been growing rapidly, but the market is already assigning it a premium that assumes continued exceptional performance.
Analysts cited in the source expect Palantir’s earnings to rise 114% in 2026, followed by another 44% increase in 2027.
The 12-month median price target mentioned is around $205, while the Street-high target is around $255.
That means the upside depends heavily on Palantir continuing to outperform expectations.
And there is the catch.
When expectations are this high, simply doing well is not always enough.
Palantir may need to keep delivering strong revenue growth, expanding margins, winning large contracts and raising expectations at the same time.
Michael Burry Is Looking at a Different Problem
While Palantir bulls are focused on growth, investor Michael Burry has been looking at the company’s financial structure and valuation.
His argument is not that Palantir has no growth.
It is that investors may be valuing the company more like a high-quality software platform than a business whose financial characteristics, in his view, deserve a lower multiple.
One metric he highlighted is Palantir’s deferred revenue ratio, which was around 32%.
Burry compared that with Accenture at roughly 31% and noted that major subscription software companies such as Salesforce and ServiceNow have considerably higher ratios.
His broader argument is that Palantir’s revenue profile can look more like a consulting business than a traditional subscription software company.
That distinction matters because the market generally assigns very different valuations to consulting businesses and high-growth SaaS companies.
Receivables Are Another Warning Sign
Burry also pointed to Palantir’s accounts receivable.
The balance increased from approximately $1.04 billion at the end of 2025 to $1.49 billion as of June 30.
One customer represented 27% of that receivables balance, even though no individual customer accounted for more than 10% of revenue.
That does not automatically mean there is a problem.
But it is something investors can reasonably watch.
When receivables rise significantly, investors want to understand whether customers are simply taking longer to pay or whether revenue is being recognized faster than cash is being collected.
For a company trading at a premium valuation, even relatively small questions around cash conversion can receive a lot of attention.
Then There Is the Buyback Question
Palantir also had a $1 billion share repurchase authorization but bought back only around $75 million of stock in 2025 before the authorization was canceled.
That raises a natural question for investors.
If management believes the stock is attractive enough to repurchase, why not use more of the authorization?
Again, this is not necessarily evidence of a fundamental problem.
But when the stock is trading at a very high valuation, investors naturally scrutinize how management chooses to allocate capital.
The PwC Partnership Adds Another Piece to the Bull Case
Just as the valuation debate was getting louder, Palantir received another piece of positive news.
PwC expanded its strategic alliance with Palantir.
The companies are working on an AI-native deals platform using Palantir’s Foundry and AIP software.
The platform is aimed at mergers, acquisitions and divestitures, with the companies saying it could help clients execute deals faster while reducing certain transaction costs.
This is important for a different reason than the Army contract.
The Army order demonstrates government demand.
The PwC relationship provides another example of enterprise demand.
That matters because Palantir’s long-term opportunity is much larger if its AI platform can become deeply embedded across both government and commercial organizations.
Two Very Different Palantir Stories Are Playing Out
And this is what makes the stock so interesting.
There is a very strong bull case:
- AI demand is accelerating
- Revenue growth is exceptionally strong
- Existing customers are increasing spending
- New customers continue to arrive
- Contract value is growing
- The government business is expanding
- TITAN is moving into production
- Enterprise partnerships are developing
- Full-year guidance has been raised
But there is also a clear valuation case:
- The stock has risen sharply
- Expectations are extremely high
- The valuation leaves little room for disappointment
- Receivables deserve monitoring
- Investors are debating the quality and nature of Palantir’s revenue
- Government contracts can depend on budgets and appropriations
- Future growth needs to justify today’s price
Neither side can simply be ignored.
Palantir can be an exceptional company and still be an expensive stock.
That distinction is critical.
What Investors Should Watch Next
The Army contract itself is important, but the bigger question is what comes after it.
Investors should keep an eye on:
1. TITAN deliveries
The ability to successfully deliver the eight initial systems could strengthen the case for follow-on orders.
2. The expected fiscal 2027 order
The next Army order could provide a clearer indication of how significant TITAN becomes within Palantir’s defense business.
3. Revenue growth
The company needs to maintain its unusually strong growth rate for the current valuation to make sense.
4. Margins and earnings
Revenue growth is only part of the story. Investors will want to see whether earnings continue to grow at an equally impressive pace.
5. Customer expansion
The 157% net dollar retention rate is a major bullish signal. Whether that remains elevated will be important.
6. Cash collection
The rise in accounts receivable makes cash conversion another metric worth watching.
So, Is Palantir Finally Too Expensive?
That is still an open question.
The recent Army contract does not solve the valuation problem.
At the same time, the valuation debate does not make the Army contract irrelevant.
Both can be true.
Palantir is winning meaningful contracts and growing at an extraordinary rate. The company is also priced for a future in which that growth continues for a long time.
That is the real investment debate.
If Palantir keeps beating expectations, expanding customer spending and turning programs such as TITAN into larger sources of revenue, today’s valuation could become easier to defend.
If growth slows materially, however, the stock could face pressure even if the underlying business continues to perform well.
For investors, the biggest risk may not be that Palantir stops winning.
It may be that Palantir keeps winning, but not quite fast enough for the price investors are currently paying.
And that is why a $127 million Army order can arrive, the business story can get stronger, and the stock can still fall 6%.
The company is being judged not against today’s performance, but against an exceptionally ambitious future.