Palantir's Next Big Growth Opportunity: Policing the Prediction and Sports Betting Markets?

Prediction markets have been soaring in popularity over the past several months. They give people the opportunity to bet on just about anything and everything, including sporting events and political outcomes.

However, as the industry's growth takes off and consumers bet heavily on prediction markets, there's also the problem of bad actors potentially undermining it by using insider information, for example, to skew the odds in their favor.

This is where Palantir Technologies (NASDAQ: PLTR) can help offer solutions. Its artificial intelligence (AI) platform has helped companies improve efficiency and improve their operations. And the data analytics company could have its next big growth opportunity in the prediction and sports betting markets, as it recently made a deal with a major customer.

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Polymarket partners with Palantir

Polymarket refers to itself as "the world's largest prediction market," and in an effort to add trust and confidence in its platform, it is taking steps to crack down on suspicious activity. It recently announced it would be using a platform that Palantir and TWG AI have developed to help prevent and report insider trading and other suspicious activities.

Specifically, the platform will focus on monitoring the sports markets, utilizing analytics to help identify problematic users and bets. This could potentially open the door for Palantir to provide valuable services to the growing prediction and sports betting markets and unlock a huge growth opportunity for its business.

According to analysts at Grand View Research, the sports betting market is projected to grow at a compounded annual growth rate of 11% through to the end of the decade. For the prediction markets, however, the annual growth rate is significantly higher at more than 28%.

Is Palantir's stock a buy on this news?

Palantir's business has been growing at an impressive pace, with CEO Alex Karp routinely boasting of the relentless demand the company is experiencing. In 2025, the company's revenue rose by 56%, to just under $4.5 billion.

As impressive as that is, however, investors shouldn't overlook the sky-high valuation that comes with the stock. At more than 240 times its trailing earnings, the stock is incredibly expensive and effectively prices in a lot of growth into its current valuation. While the growth opportunities in the prediction markets could help strengthen its numbers even further, I don't think they'll be enough to make the stock a compelling buy today.

Unless you're prepared to hang on for the long term and are willing to handle the inevitable volatility that will come with Palantir's stock, you may be better off putting it on a watch list for now.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.