Palantir Valuation Doesn't Make Sense, Brent Thill Says

By Bloomberg Technology

Categories: Startup, VC, AI

Summary

Palantir's fundamentals are exceptionally strong with 115% commercial growth and beat revenue guidance, but its 45x revenue valuation is unjustifiable even by AI-era standards, creating a significant disconnect between operational performance and stock price.

Key Takeaways

1. Palantir's commercial business is growing at 115%, comparable to very few companies, demonstrating successful market expansion beyond government contracts into mainstream enterprise.
2. At 45x revenue, Palantir trades at 2x the valuation multiple of comparable high-quality SaaS companies like CrowdStrike trading sub-20x revenue, creating significant valuation arbitrage.
3. The company's forward-deployed engineer model is being actively emulated by industry giants like Oracle and Salesforce, validating its competitive moat and operational approach.
4. Stock price declined from $200+ to mid-$150s specifically because investors are reassessing valuation, not fundamentals, suggesting multiple compression rather than business deterioration.
5. Growing into premium valuations takes extended periods—similar to Snowflake—requiring sustained growth rates and cash flow generation that may take years to justify current multiples.

Topics

• SaaS Valuation Multiples
• Commercial Market Expansion
• AI Enterprise Software Growth
• Government Contract Dependency
• Multiple Compression in Tech

Transcript Excerpt

Let's talk about the outlook. Annual revenues seen between $7.18 billion and $7.2 billion. The estimate going in had been four $6.27 billion. So quite a beat there when it comes to the expectations. Brent, you can see that reflected in the shares. What do you make of what we learned at the top of the hour? There's still a crush in the numbers. And I think in a world of AI that is getting crushed and soft firm bite, my coverage universe is going straight south. Now, Palantir's fundamentals are ar...