Palantir Technologies (PLTR, Financials) reported revenue of $2.87 billion for calendar 2024, a 29% increase from the previous year, as demand for defense and artificial intelligence tools surged. Shares have risen 339.91% over the past 12 months and 28.13% year-to-date, closing at $96.34 as of 10:44 a.m. Eastern Time on April 15.

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The company's market value has surpassed $200 billion, and it was recently added to the S&P 100 index.

Commercial revenue in the United States climbed 54% year-over-year, while sales to U.S. government agencies rose 30%, the company said. U.S.-based clients now account for 66% of Palantir's overall business, with commercial operations making up 45% of total revenue.

Chief Executive Officer Alex Karp attributed the company's performance to its long-standing focus on building software for national security, in contrast to consumer-focused tech peers. In interviews and public statements, Karp has criticized Silicon Valley's historic aversion to government partnerships and promoted Palantir's mission of supporting Western democracies through defense applications.

Palantir's generative AI platform, AIP, introduced in 2023, has been a key driver of growth. Clients such as Walgreens have adopted the technology to improve operational efficiency.

The company's earlier legal battle with the U.S. Army also marked a turning point. Palantir sued the Army in 2016 over procurement access, with a federal judge siding with the company. Palantir later secured a multiyear contract from the Army, now worth more than $600 million.

Karp and Palantir's head of corporate affairs, Nicholas Zamiska, recently co-authored The Technological Republic, a book calling on Silicon Valley firms to support national defense and outlining Palantir's stance on modern warfare. The company argues that future conflicts will be determined by software capabilities.

Despite strong financial performance, analysts have raised concerns over Palantir's valuation. The company traded at 491 times its trailing 12-month earnings as of April 14, far above the Nasdaq 100's multiple of 33. Mizuho analyst Gregg Moskowitz wrote in a recent note that while Palantir's execution has been strong, its valuation already discounts significant further acceleration and upside.

Looking ahead, Palantir faces potential challenges from U.S. defense budget cuts under the Trump administration and global economic instability. The company continues to expand in Europe, where governments are boosting military spending, but growth prospects remain uncertain.

Palantir's business model remains anchored in long-term government contracts and its positioning as a core player in modern defense infrastructure. Karp, who has led the company since its founding, said he is focused on performance over popularity. You don't win your argument by convincing people you're right, he said. The axis that matters is: Does the business work?