Great Krypton! Palantir Soars Past Salesforce, But Is This Tech Giant Flying Too Close to the Sun?

Up Up and Away... to the Top 10!

Greetings citizens of Earth! Superman here reporting live from the Fortress of Solitude (don't worry I filed a permit). I've been keeping a close watch on our planet's technological advancements and boy have things been moving faster than a speeding bullet! Palantir the data analytics whiz kid has rocketed into the top 10 U.S. tech companies by market cap. That's right folks they've surpassed Salesforce leaving them in the dust like Lex Luthor after a tickle fight.

A Quintuple Threat!

This isn't just a small leap for Palantir; it's a giant leap for tech kind! Their stock has more than quintupled in value over the last year. Quintupled! I had to check my heat vision wasn't malfunctioning. And get this – they're on track to be the S&P 500's top performer for the second year running. It's enough to make even Lex Luthor's hairpiece stand on end. Meanwhile the Nasdaq is down 7% this year even after bouncing back some over the past three weeks. It's like watching a supervillain trip over his own cape!

Government Contracts: A Fortress of Solitude for Revenue?

So what's Palantir's secret? Well it seems their government business is booming. A whopping 45% growth last quarter thanks in part to a $178 million contract with the U.S. Army. Now I'm all for truth justice and the American way but even I have to wonder if relying so heavily on defense contracts is a sustainable strategy. It's like using Kryptonite to power a lightbulb – effective but potentially problematic in the long run.

Karp's Korner: Defending the Defense

Palantir's CEO Alex Karp isn't shy about his company's commitment to the military. He's even suggested that some former critics in Silicon Valley are now following Palantir's lead. As Karp wrote their "commitment to building software for the U.S. military those whom we have asked to step into harm's way remains steadfast." Sounds like a man who's ready to stand his ground. Good for him. Maybe I should hire him to debate with Lex Luthor once in a while instead of throwing him in jail all the time!

Faster Than a Speeding Bullet... or Just Overvalued?

Here's where things get a bit tricky. While Palantir's market cap is soaring their sales and profit are… well not quite as super. Salesforce the company they just overtook generates over 10 times more revenue. That means Palantir's valuation multiples are higher than a Kryptonian rocket ship. As one analyst put it "Fundamentals are clearly alive but we think irrational valuation." Ouch! That's like saying I have a slight allergy to Kryptonite.

A Word From The Man Himself

Even Palantir's CEO seems to agree that their company may not be for everyone and told CNBC's Brian Sullivan that "You don't have to buy our shares," Karp said. "We're happy. We're going to partner with the world's best people and we're going to dominate. You can be along for the ride or you don't have to be." It's like they are trying to scare people away from investing in their company. But if the CEO is happy so am I! As I always say "There is a right and a wrong in the universe and the distinction is not hard to make."