Palantir stock has delivered market-crushing returns over the last five years.
The launch of the company's Artificial Intelligence Platform (AIP) helped kickstart incredible growth.
Palantir Technologies (NASDAQ: PLTR) had its initial public offering (IPO) on Sept. 30, 2020. Since then, it has taken investors on a wild ride. While the company's valuation has frequently seen volatile swings and its business has seen periods where growth slowed to very low levels, the artificial intelligence (AI) company has emerged from downturns to become one of the most explosive tech stocks on the market.
If you made a $10,000 investment in the stock a half-decade ago and held on to your position, you would now be sitting on a small fortune.
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Palantir stock has surged more than 1,890% higher over the last five years -- absolutely trouncing the S&P 500's still-impressive total return of 125% across that stretch. With that level of gains, investors who purchased $10,000 of the stock five years ago would now be sitting on a position worth more than $199,120 if they took a buy-and-hold approach to their shares.
The company's sales, earnings, and valuation growth really accelerated with the launch of its Artificial Intelligence Platform (AIP) -- a software suite that makes it easy for organizations to integrate large language models (LLMs) and other AI tools across their operations. AIP launched in April 2023, and the service has kicked Palantir's sales and earnings growth into overdrive.
Following rapid growth for its share price, Palantir is now one of the most growth-dependent major tech stocks on the stock market. As of this writing, the stock is valued at approximately 113 times expected sales and 308 times expected earnings. While its valuation profile makes Palantir a risky investment, the company's strengths in AI and momentum with customers in both the public and private sectors suggest that the stock could still deliver wins for long-term investors.
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Keith Noonan 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.