Palantir Technologies saw a massive revenue jump in early 2026,hitting its best growth numbers yet. Revenue hit $1.63 billion,up 85% year-over-year,with U.S. commercial revenue shooting up 133% to $595 million . This strong showing led Palantir to boost its annual revenue forecast by 10 percentage points,now eyeing 71% growth.
But CEO Alex Karp didn't hold back on CNBC's Squawk Box,criticizing AI firms like OpenAI and Anthropic. He slammed their token-based pricing, saying it frustrates enterprise clients. "Enterprises feel like they're wasting time with tokens,getting no value, while losing their IP," Karp said,reflecting a growing dissatisfaction with these models.
More companies are now questioning the returns from AI services. Karp noted a move from "tokenmaxxing" to open-weight models, offering similar results at lower costs. Companies want more control over their data and AI systems .
In a strategic twist,Palantir expanded its partnership with Nvidia to create custom AI models for U.S. government agencies. Karp said this fits technical customers who want ownership of their computing and data. He argued that outsourcing key decisions to few Silicon Valley firms,especially in defense, is risky.
Palantir's financial success is highlighted by its adjusted operating margin, rising to 60% from 44% a year ago. Its Rule of 40 score,combining revenue growth and profit margins, hit an impressive 145%, rivaling giants like Nvidia and Micron. U.S. commercial contract deals rose to $4.92 billion, up 112% year-over-year.
Yet,Karp's critique of the token model echoes among budget-tight enterprises. For instance,Uber limited spending on AI tools after maxing out its budget in four months. This highlights the limits of the token approach,which Karp argues is becoming less viable for many businesses.
Despite the growth,Palantir's stock has stumbled,dropping 28.67% so far this year. As of July 10, shares closed at $126.79, with a forward price-to-earnings ratio near 91. This valuation raises doubts about the sustainability of company's growth and whether stock has outpaced its actual business performance .
Investors remain wary,with some,like Michael Burry,betting against Palantir . Burry's firm revealed a put position on 5 million Palantir shares, worth about $912 million. Such big bets against Palantir show skepticism about its growth potential.
Karp's critique of the AI industry affects companies like OpenAI and Anthropic that depend on token-based revenue. If businesses keep moving to open-weight models, it could disrupt growth assumptions of these AI firms . Karp’s comments suggest the debate over AI business models is heating up, with industry leaders voicing concerns more openly .
As Palantir navigates this changing scene,Karp's focus on data ownership and control resonates with companies wanting more say over their tech resources. This shift could change the competitive dynamics in the AI sector...
