Palantir's Commercial Strategy Is Finally Paying Off
Key Points
AIP powers real operational AI, not demos.
Cloud partnerships are unlocking new opportunities.
Palantir's commercial success isn't just theoretical, it's backed by real-world examples of customer adoption.
Palantir Technologies (NASDAQ: PLTR) has long been recognized for its work in the shadows -- helping government agencies, such as the Department of Defense and the CIA, make sense of vast amounts of data.
But for years, investors questioned whether it could ever succeed in the commercial world. While the company often emphasized commercial expansion, the numbers have historically lagged behind those of its core government business.
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But that's changing -- and fast. Today, Palantir's commercial business is not just growing, it's accelerating. Thanks to the interest in artificial intelligence (AI) and the company's strategy, it may finally be building a sustainable and scalable engine outside public business.
Image source: Getty Images.
AIP is the inflection point
Palantir's Artificial Intelligence Platform (AIP) is emerging as its breakout commercial product. Launched as the fourth platform after Gotham, Foundry, and Apollo, AIP is Palantir's answer to the rapid rise in demand for enterprise AI solutions.
Commercial customers can use it to integrate large language models (LLMs) into their internal data workflows, all while preserving the security, governance, and compliance that Palantir is known for. AIP enables enterprises to build and scale AI agents with full access controls, audit trails, and encryption baked in. With AIP, customers can immediately see tangible benefits in areas such as automation, problem-solving, and workflow improvements without compromising on data and security requirements.
Palantir has also rolled out AIP boot camps, five-day hands-on workshops that help companies go from zero to a working AI use case using their internal data. Customers don't just learn how to prompt -- they architect LLM-powered workflows, evaluate fine-tuning vs. prompting, and build real systems. For some customers, boot camps have helped them resolve problems they'd been wrestling with for years.
Not surprisingly, these efforts have yielded tangible improvements in financial metrics. In the first quarter of 2025, U.S. commercial revenue increased 71% year over year to $255 million, and U.S. commercial total contract value (TCV) bookings rose 183% to $810 million. The U.S. commercial customer count also grew 65% to 432.
Strategic cloud partnerships could be an important growth lever
Beyond the launch of AIP and AIP boot camp, Palantir has also expanded its partnerships with cloud giants to integrate its AI platform within the ecosystems that customers already use.
With Google Cloud, Palantir launched Foundry and AIP integrations for commercial clients in retail, healthcare, and logistics. With that, companies leverage BigQuery and other Google Cloud services while tapping into Palantir's data modeling and orchestration tools.
On Amazon Web Services (AWS), Palantir is working with enterprise clients to run AIP workloads using Claude and other models. A major U.S. insurer, for example, used AIP on AWS to reduce underwriting times from two weeks to just three hours.
These integrations remove key roadblocks to adoption. Besides, these partnerships are a win-win-win. Customers don't have to rip and replace their existing infrastructure. Cloud providers retain clients within their ecosystem. And Palantir gains distribution and scale.
Real-world examples of customer adoption
Palantir's commercial success isn't theoretical. It's happening in the field.
For instance, Heineken transformed its supply chain using AI agents to optimize delivery and shipping. With the help of AIP, the team was able to build what had previously taken them three years in just three months.
AIG, an insurance giant, expects the adoption of AIP to aid in AI-powered underwriting, aiming to double its five-year revenue growth rate from 10% to 20%. This example suggests that AIP not only helps improve efficiency, but also acts as an enabler in increasing the top line.
Another example is Rio Tinto, which leverages the Foundry and AIP platforms to orchestrate and optimize train routes and maintenance needs for dozens of unmanned trains running 24/7.
These examples show that AIP isn't just a shiny front end for AI experimentation -- it's delivering real outcomes across industries.
What it means for investors
Palantir's long-awaited commercial pivot is finally delivering tangible results.
With AIP gaining traction and strategic partnerships expanding its reach, Palantir is transforming from a government-first software vendor into a scalable enterprise AI company.
But while the growth is promising, investors should approach with measured optimism. Palantir trades at a rich valuation, reflecting high expectations for future expansion. At the time of this writing, the stock has a price-to-sales (P/S) ratio of 121.
So, the key question is whether Palantir can sustain this momentum into the future. If the company continues to deliver strong commercial wins, and the valuation becomes more attractive, this could be a compelling long-term investment opportunity.
All said, investors should keep the stock on their watchlist.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Lawrence Nga has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Palantir Technologies. The Motley Fool has a disclosure policy.