Ought to I purchase Palantir inventory for my ISA after its blowout This fall earnings? – Imperial Wire

Palantir (NASDAQ: PLTR) inventory may very well be about to surge once more. That’s as a result of the synthetic intelligence (AI) software program firm simply posted its fourth-quarter 2025 earnings and the numbers have been actually unimaginable.

Is it time to purchase this US progress inventory for my ISA? Let’s focus on.

Unbelievable numbers for This fall

I assumed Palantir’s This fall outcomes could be good. However I didn’t suppose they’d be this good.

For the quarter, income was up an enormous 70% 12 months on 12 months to $1.4bn. In the meantime, US income was up an insane 93% to $1.1bn.

Driving this progress was US business income. This got here in at $507bn, up 137%, signalling that US companies are scrambling to undertake its AI expertise.

Nonetheless, US authorities income (defence and nationwide safety) was additionally very sturdy. This was up 66% to $570m.

It wasn’t nearly income although. Income additionally soared.

For the interval, web earnings attributable to widespread stockholders was $609m. That determine was up round 670% 12 months on 12 months.

As for the software program firm’s ‘Rule of 40’ rating (income progress plus working margin), this was 127. That’s principally extraordinary.

Wanting forward, administration mentioned that it’s aiming for income progress of 61% this 12 months (the consensus forecast was about 40% progress). In different phrases, the corporate is anticipating 2026 to be one other blockbuster 12 months.

Alex Karp gems

Within the firm’s letter to shareholders, CEO Alex Karp did his normal factor. “Our monetary outcomes, these crude and imperfect metrics by which a market stuffed with each pleasure and concern makes an attempt to evaluate the worth of the businesses it covets, have once more exceeded even our most bold expectations,” he wrote.

“We’re on the outset, the very starting, of a generational venture,” he famous. So, he clearly sees a number of progress potential forward.

Ought to I purchase now?

Now, whereas that is all super-exciting, the valuation right here stays very excessive. At present, Palantir has a market cap of round $390bn.

On condition that the corporate is forecasting income of about $7.2bn this 12 months, the price-to-sales ratio (word I’m speaking about price-to-sales not price-to-earnings) is roughly 54. That’s a little bit of a turn-off for me (it’s one of many highest price-to-sales ratios within the S&P 500 index).

At that gross sales a number of, there’s no room for a slowdown. If progress was to all of the sudden reasonable for some purpose, the share value may drop considerably.

It’s price noting that famed quick vendor Michael Burry has been concentrating on this inventory lately. He clearly sees it as overvalued.

It’s additionally price desirous about a possible downturn in AI shares. This space of the market has seen some weak spot lately and we will’t rule out one other leg down.

One different concern on my thoughts is Palantir’s involvement with ICE (United States Immigration and Customs Enforcement). Palantir has mentioned that there’s no malicious intent with its work with the US authorities. Nonetheless, not everyone seems to be satisfied.

Contemplating these points, I’m going to maintain the inventory on my watchlist for now. I may very well be enthusiastic about shopping for it at some point, however I’m not prepared to purchase simply but.