Peter Thiel Still Owns Roughly 3% of Palantir, a Stake Worth More Than $10 Billion. Here's Why His Continued Conviction Matters for Shareholders.

Peter Thiel, one of Silicon Valley's most prolific investors, co-founded Palantir (NASDAQ: PLTR) with Stephen Cohen, Joe Lonsdale, Alex Karp, and Nathan Gettings in 2003. Through his personal assets and venture capital fund, Thiel invested about $30 million in the new company.

Before Palantir went public through a direct listing in 2020, Thiel owned nearly 10% of its private shares. He's sold millions of shares since its market debut, but he still holds a 3% stake -- which is worth more than $10 billion today -- and remains the company's executive chairman. Let's see why his continued conviction is bullish for Palantir's long-term prospects.

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Palantir is still growing like a weed

Palantir operates two data aggregation and analytics platforms: Gotham for its government customers and Foundry for its commercial customers. Both platforms aggregate data from disparate sources, spot trends, and help their clients make faster data-driven decisions.

A large number of U.S. government agencies and large companies -- including Amazon and Apple -- use Palantir's services. It's also expanding its AI platform, which enables its clients to create custom AI apps within its ecosystem.

From 2021 to 2025, Palantir's revenue grew at 30.5% CAGR. It turned profitable in 2023, and its annual net income rose nearly eightfold over the following two years. Its soaring market cap and stable profits led to its inclusion in the S&P 500 in 2024. Geopolitical conflicts often generate tailwinds for Gotham, while the AI arms race is driving more companies to use Foundry.

From 2025 to 2028, analysts expect Palantir's revenue and EPS to grow at CAGRs of 57% and 69%, respectively. That acceleration should be driven by the growth of its AI enterprise bootcamps, which help its U.S. commercial customers build new AI applications within a week; new government contracts, and its expansion into the nascent space economy market.

Why does Thiel's stake matter to Palantir's investors?

Palantir's stock has surged nearly 620% over the past five years and isn't cheap at 77 times next year's earnings. Its insiders have also been net sellers over the past 12 months.

However, Thiel's decision to stick with Palantir is arguably a bullish sign for the stock because he often liquidates his other winning investments. For example, Thiel was a co-founder of the company that would eventually become PayPal (NASDAQ: PYPL) in 1998.

Thiel sold his entire 3.7% stake in PayPal for $55 million after eBay acquired the company for $1.5 billion shortly after its 2002 IPO. Thiel left a lot of money on the table by selling that stake, but he's stuck with Palantir for a lot longer. Therefore, Thiel's conviction in Palantir suggests the hot AI stock might still have plenty of upside potential.

Leo Sun has positions in Amazon and Apple. The Motley Fool has positions in and recommends Amazon, Apple, Palantir Technologies, PayPal, and eBay. The Motley Fool recommends the following options: short September 2026 $47.50 calls on PayPal. The Motley Fool has a disclosure policy.