Palantir’s Growth Engine Hits a Privacy Speed Bump as Valuation Questions Persist

No investor ever bought Palantir for an easy narrative. The data-analytics specialist has just delivered a quarter that would make most software firms envious — revenue up 85% to $1.63 billion and adjusted earnings per share doubling to $0.33. Yet the stock remains mired in negative territory, down 19.02% year-to-date to €115.88, caught between a sky-high valuation and a fresh reputational storm on the other side of the Atlantic.

Freedom Capital analyst Almas Almaganbetov sees that disconnect as an opportunity. He has lifted his price target sharply from $170 to $230, implying roughly 70% upside from recent US levels. His reasoning is straightforward: government demand is outstripping what Palantir can currently service, forcing the company to prioritise public-sector contracts over parts of its commercial business. That strategic pivot may not automatically help margins, but it underscores the depth of institutional appetite.

A real-time laboratory in Ukraine

Much of that growth story is being written on the battlefield. CEO Alex Karp travelled to Kyiv to meet President Volodymyr Zelenskyy and digital minister Mykhailo Fedorov, focusing on expanding the “Brave1 Dataroom” — a platform that trains AI models on live combat data. The target: a 95% interception rate against aerial threats, particularly Russia’s roughly 27,000 Shahed drones. For Palantir this is far from a typical software contract; it is a proving ground under real-time conditions.

More than 100 companies now use Brave1 to train over 80 AI models for target recognition, data labelling, and faster sensor-to-defence-system links. Ukrainian officials report that data labelling runs 90% faster and interception accuracy has climbed 40%. Such metrics explain why military planners are paying close attention — and why the US Army is taking notes.

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Washington takes notice, London pushes back

US Army Secretary Dan Driscoll told the Senate that Ukraine’s “Delta” system has outpaced American capabilities in integrating sensors, drones, and weapons. The Pentagon’s answer is “Operation Jailbreak” at Fort Carson, a push to break down software barriers and force real-time data flows. Palantir is working on the effort alongside Boeing, Lockheed Martin, and Anduril.

But while the US deepens its embrace, the UK is proving a trickier customer. NHS England’s £330 million Federated Data Platform project — designed to unite the health service’s fragmented legacy systems — has become a flashpoint over data access. Internal documents warn that newly approved administrative roles could give external contractors, including Palantir employees, extensive insight into patient records stored in the sensitive National Data Integration Tenant (NDIT), where data sits before pseudonymisation.

Palantir pushed back firmly, with a spokesperson stressing that the company operates solely as a data processor following client instructions, and that any unauthorised use would be both illegal and “technically impossible” due to NHS controls. The episode, however, highlights a vulnerability at the heart of Palantir’s business model: its reliance on government trust. In the world of public-sector data platforms, perception of control can matter as much as product capability.

Palantir at a turning point? This analysis reveals what investors need to know now.

A valuation that leaves no room for error

For all the operational momentum, the market remains deeply cautious. Palantir trades at roughly 150 times earnings and 70 times revenue — multiples that demand years of uninterrupted expansion. Critics such as Michael Burry have maintained bearish bets, and the stock’s technical picture does little to reassure. The shares sit 7.25% below their 50-day moving average and a more pronounced 17.40% below the long-term trend line.

The NHS controversy injects a new layer of uncertainty just as the company needs clean air to justify its premium. Every fresh detail about access roles, control chains, and data boundaries will now be scrutinised by regulators and investors alike. For a stock priced for perfection, reputation risks are the last thing Palantir can afford.

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