The final full week before the holidays brings the last window for companies to report September-quarter results. It’s the last clean look at earnings before seasonal noise and the fourth-quarter holiday fog. The market’s still sorting what matters in AI— with some revaluations of software, hardware and hype.

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Companies Discussed

In This Note:

1. Companies Discussed

2. Of Karp and Cotton

3. Tweet O’ The Week

4. Epistrophy In The News

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6. Availability This Week

Of Karp and Cotton

Palantir Q3 Earnings Embrace A Rabid Retail Base

Palantir Technologies (PLTR: NYSE) reported a strong quarter after a 12-month run when it has become both a core defense supplier and a consumer brand. The same firm that builds battlefield software now sells $119 tote bags and $99 gym shorts to its shareholders. The point is the same: to make Palantir impossible to ignore.

And yet the insanely stretched valuations (~700x earnings, 100 years of sales) finally hit the stock, which fell 12% in the subsequent week. It let the entire AI-stock complex to take a breather, but the selloff obscured what Palantir has achieved, both as a software company and juicer of its own stock.

Its software defines a new kind of infrastructure. Gotham supports defense and intelligence agencies. Foundry serves industrial clients. The Artificial Intelligence Platform, or AIP, links the two, running machine-learning models on top of real-time operations. All share a single architecture called Ontology, which maps data, people, and assets so algorithms can act instead of observe.

The company’s streak of GAAP profitability continued in Q3 2025. Revenue reached $1.181 billion, up 63% year-over-year. U.S. revenue was about $883 million while U.S. government revenue rose 52% to approximately $486 million. Adjusted free cash flow for the quarter was about $540 million, or ~46% of revenue. Management raised full-year 2025 revenue guidance to between $4.396 billion and $4.400 billion, implying growth of ~53% Y/Y..

The government business remains its foundation. Palantir is embedded in the U.S. Army’s digital modernization through a 10-year enterprise software agreement valued at up to $10 billion. The framework consolidates multiple legacy contracts into a single procurement vehicle covering logistics, readiness, and data analytics. The company also supplies software to the Air Force, the Department of Homeland Security, and Immigration and Customs Enforcement.

In April, ICE awarded Palantir a $30 million contract for “ImmigrationOS,” a nationwide case-management and surveillance system intended to coordinate enforcement data through 2027. The platform expands earlier ICE systems built on Palantir software dating to 2014. The company’s filings describe these projects as long-term revenue streams that extend beyond political cycles. 

Internationally, Palantir has expanded its defense portfolio across allied governments. In September the U.K. Ministry of Defence awarded the company a five-year, £750 million contract for AI-enabled command software. Palantir also pledged £1.5 billion in British investment by 2030 and said it would make London its European defense headquarters. In October Poland’s Ministry of National Defense signed a letter of intent with Palantir to develop AI and cybersecurity capabilities as the country raises defense spending to 5 percent of GDP. Earlier this year NATO adopted Palantir’s Maven Smart System, allowing the company’s command-and-control technology to operate across all 32 member states.

Those agreements, along with the U.S. Army contract, form the backbone of Palantir’s government segment. They are structured as multi-year frameworks with options that can be exercised as new funding becomes available. A brief federal shutdown this fall delayed some U.S. contract processing, but pre-shutdown spending accelerated as agencies rushed to obligate remaining funds. When appropriations resume, those options are expected to restart without rebid.

Palantir’s commercial business is now the company’s fastest-growing line. U.S. commercial revenue rose up 77% Y/Y.  U.S. commercial revenue surged 121% to roughly $397 million,  driven by demand for AIP in manufacturing, energy, and health care, well above our estimate that it would only double. The system—derived from Palantir’s defense software—runs predictive maintenance, power-grid modeling, and hospital-capacity analytics. The company’s “Warp Speed” operating system is already deployed in several large industrial facilities.

In May, Palantir announced integration between its Ontology architecture and Nvidia’s (NVDA: NASDAQ) accelerated-computing platform. The connection lets Palantir customers run large AI models directly within AIP, using Nvidia hardware for training and inference. The move extends Palantir’s reach into industrial AI, an area projected by industry groups to exceed $150 billion in annual spending by the end of the decade.

Competition has thinned. C3.ai (AI: NYSE) remains a smaller player in enterprise AI after restructuring its sales model earlier this year. Larger vendors integrate AI features into existing suites, but few hold Palantir’s level of government accreditation or experience with classified data. Its position inside critical infrastructure—defense, energy, logistics—gives it a practical moat: replacement would require re-engineering entire systems.

The company’s financial structure reflects that durability. Palantir’s balance sheet carries no debt and roughly $6.4 billion in cash and equivalents. Depreciation and amortization over the past year totaled about $70 million, still less than 2 percent of operating cash flow. Free cash flow per share in the September quarter was about $0.21, slightly above reported earnings per share of $0.18. The low capital intensity turns incremental revenue into incremental cash.

Beneath those figures lies a rare investor culture. Nearly half of Palantir’s shares are held by individuals rather than institutions—an ownership ratio uncommon among companies of similar size. 

Its online store is a sign of that: store.palantir.com resembles a command terminal: green code scrolls down a black screen as users browse. It sells a $119 padded nylon tote with Velcro patches, $99 “PLTR-TECH” performance shorts with reflective markings, a $55 baseball cap, and heavyweight cotton T-shirts. The best-known design carries a watercolor portrait of CEO Alex Karp—white hair, wire-frame glasses, and an intent stare—styled like a concert poster. Every order includes a printed note from Karp thanking customers for “defending the West.”

Palantir’s head of strategic engagement, Eliano Younes, said the merchandise program is intended to break even. He called Karp “a cultural icon” and described the brand as “the most pro-West, meritocratic, winning-obsessed on the face of the earth.” The company’s foundation publishes The Republic, a magazine covering technology, national security and Western institutions.

By turning shareholders into visible advocates, the company reinforces the loyalty of its retail base. Mentions of “PLTR” surged more than 300 percent on Reddit investing forums after the last quarterly report. The shirts and tote bags are an extension of that marketing—psychological ownership turned tangible.

The political implications are unavoidable. Palantir doesn’t so much mine data as it excavates privacy. Palantir’s involvement in immigration enforcement has drawn criticism from civil-rights groups, and its open alignment with the Trump administration has polarized potential customers. Government software is difficult to unwind once installed.

Six years after going public, Palantir has achieved what few software companies manage: profitability, global government reach and a rabid shareholder fanbase. It enters its November earnings report with a backlog of long-term defense contracts, a fast-growing commercial business, and cash flow that scales with every deployment.

The software, the branding and the mythology all reinforce one message: a pervasive Palantir – whether in code or cotton.

Tweet O’ The Week

Epistrophy In The News

On Yahoo Finance TV, I joined Allie Canal to unpack Palantir’s (PLTR: NYSE) quarter—solidly profitable, fast-growing, and somehow still dull. The fascination endures not just in its numbers but in its unusually loyal retail following.

I was quoted in the BBC’s “Tech Decoded” newsletter about Amazon’s layoffs of 14,000, saying: “Amazon's headcount barely shrank, its morale surely did.”

Then on NewsNation, I spoke with Connell McShane about Elon Musk’s trillion-dollar pay package—what it means for shareholders, for corporate governance, and a new way to understand pay packages, not by their big gory tables but by their incremental payouts.

📆 of Epistrophy Events

Availability This Week

I’m in San Francisco or down in Silicon Valley all week. Hit me up by text for time-sensitive stuff; email works too, replies later in the day.

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