Cathie Wood Can't Stop Buying PLTR Stock. Should You Invest While It's Still Below $200?

Cathie Wood, founder and CEO of Ark Invest, is known for her investments in emerging and transformative technologies such as AI, fintech, and electric vehicles. Some of her most prominent deals include early investments in Tesla, Coinbase, and, of course, Palantir Technologies (NASDAQ: PLTR).

Palantir provides AI infrastructure for various operations. Based in Colorado, this software company specializes in building platforms that allow organizations to analyze and operationalize massive datasets, and is now serving both the government and the private sector.

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Originally, Palantir was known as a government contractor within the defense and intelligence network, but the company has successfully diversified into the commercial sector through its foundry segment. In 2023, Palantir Technologies introduced its Artificial Intelligence Platform (AIP). This breakthrough has allowed the company to venture deeper into the private sector, bringing significant growth to Palantir's U.S. Commercial segment.

Palantir stock profile

Palantir's commercial success immediately attracted attention from investors.

As of October 24, 2025, PLTR stock trades at around $184 per share, with impressive returns across various timelines, including over 300% the last year. These figures place Palantir among the top-performing AI stocks.

That said, the company's trailing 12-month price-to-earnings (P/E) ratio is about 800, which, if it sounds high, it is, at least by traditional valuations. This surge in popularity is the result of the company's reliance on a more diversified mix of clients.

Furthermore, the company achieved a Rule of 40 score of 94% in the second quarter of 2025. This metric adds the growth rate and adjusted operating margins to measure the overall health of a business, and the Rule of 40 score rewards SaaS companies that do well in both.

Values above 40% are considered positive for software companies. Therefore, Palantir's 94% score places it in an exceptional territory. Furthermore, Palantir is growing rapidly while being able to maintain profitability, and all of these factors resulted in a valuation that the bears can't agree with.

However, there are recent events that could propel Palantir stock even higher over the next year, starting with:

AI platform adoption that's driving commercial growth

Second-quarter revenue from Palantir's U.S. commercial segment surged 93% to $306 million compared to the same period last year, largely driven by the accelerating enterprise adoption of its AIP. For many investors, this growth rate also signifies Palantir's successful transition from a government-focused contractor to a comprehensive AI business that serves both the government and commercial sectors.

Palantir also crossed a key $1 billion annual run rate in its U.S. commercial segment, which is another milestone that validates the product-market fit in the sector. That said, what's more impressive is that Palantir successfully closed $843 million in U.S. commercial total contract value during the quarter, which reflects 222% growth from the same period last year.

The total contract value (TCV) is the full potential lifetime value of agreements that were signed during a specific period, which also makes it a forward-looking indicator of the subsequent quarterly revenue. The significant growth in Palantir's TCV also indicates that enterprises are betting on Palantir's platform over the next several years.

The significant total addressable market (TAM) opportunity ahead is what makes AIP more compelling. In 2024, the global enterprise AI market was valued at around $24 billion, and it was projected to reach $155 billion in 2030, reflecting a compound annual growth rate (CAGR) of 38%. These growth rates are expected to be driven by the increasing demand for automation and operational efficiency within enterprises.

Palantir's AIP allows these businesses to deploy AI agents trained with their own operational data to help compress decision timelines or significantly increase productivity -- depending on the deployment. This resonates well with enterprises in the U.S., where the pressure to utilize AI as a competitive advantage is growing, because many smaller businesses don't have the means to develop and train an AI model that can address their unique operational struggles.

Considering that enterprise AI adoption is still in the early stages, Palantir is very likely to report better figures should this adoption pace increase, and PLTR stock will likely move in the same direction.

Investment outlook

Palantir's U.S. Commercial revenue is growing at a clip exceeding 90% year over year, and the broader market is expected to grow nearly 38% through 2030. With Palantir's established platform and expanding customer base, it's inevitable for the company to capture a notable portion of this growth as the demand for AI enterprise increases.

Rick Orford has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies and Tesla. The Motley Fool recommends Coinbase Global. The Motley Fool has a disclosure policy.