Palantir Technologies Inc. CEO Alex Karp emphasized artificial intelligence’s transformative potential for enterprise operations, suggesting the technology could make workers dramatically more efficient when properly deployed.

What Happened: “Can AI make one human five humans?” Karp asked during his AIG Investor Day address, focusing on AI’s capability to enhance technical roles. “Can the large language model combined with what we call ontology make one human 10X more valuable, meaning they have 5X output at half the time?”

Karp underscored the complexity of this challenge, noting AI must be strategically implemented across decision trees rather than applied as a one-size-fits-all solution.

His comments come as Palantir continues its meteoric rise, with shares up over 12% year-to-date and 270% annually. The company’s market capitalization has swelled to $198 billion, exceeding traditional defense contractor Lockheed Martin Corp.

Why It Matters: Palantir’s Chief Information Officer Jim Siders recently revealed how Palantir practices what it preaches internally, cutting its IT workforce by 60% while maintaining operational efficiency through AI integration and organizational restructuring. This streamlining coincides with Palantir’s commercial revenue approaching $4 billion annually.

Meanwhile, Harvard economist Jason Furman critiqued Karp’s recently published book “The Technological Republic,” arguing it emphasizes cultural solutions over concrete policy recommendations.

Defense and aerospace stocks, including Palantir, have outperformed amid broader market turbulence. The iShares U.S. Aerospace & Defense ETF has risen 5.7% year-to-date while major indices have declined, highlighting investors’ continued confidence in the sector despite potential budget pressures from Elon Musk‘s Department of Government Efficiency initiative.

Palantir struggles on valuation metrics with a price-to-earnings ratio of 444 and faces negative short- and medium-term price trends. However, the data analytics firm maintains strong momentum, according to Benzinga Edge Stock Rankings.