In July, the Federal Reserve kept interest rates unchanged, but higher-than-expected unemployment figures sparked recession fears, leading to a 7% drop in the S&P 500.

Amid this downturn, Palantir Technologies (PLTR) surged over 30% in the last 3 months, driven by strong quarterly results and an upward revision of its full-year outlook.

Palantir’s success stems from its critical role in AI, particularly in data integration and analytics for both commercial and government customers.

The company’s AI platform has significantly transformed its business model, driving revenue growth and expanding margins, positioning it as a leader in decision intelligence.

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In July, the Federal Reserve left interest rates unchanged at its policy meeting as widely expected.

However, investors received unsettling news in the form of higher-than-expected unemployment figures.

The Bureau of Labor Statistics announced the unemployment rate had risen to 4.3%, crossing above the “Sahm Rule” recession threshold.

The rule tracks the three-month rolling average unemployment rate. If that rolling average climbs 0.5 percentage points above its one-year low, it’s a sign that a downturn has started.

Sahm Rule, devised by former Fed economist Claudia Sahm, has accurately predicted every U.S. recession since World War II by tracking unemployment rate changes.

The jobs data triggered a sharp downturn in the markets. Over the subsequent two days, the S&P 500 plummeted 7% as recession fears mounted.

While most tech stocks have been falling in recent months amid recession fears, Palantir Technologies (PLTR) has surged over 30% thanks to reporting strong quarterly results and raising its full-year outlook.

Palantir is considered one of the most important companies in the AI ecosystem due to the critical role its platforms play for both commercial and government customers.

Its Foundry and Gotham platforms allow organizations to integrate and analyze massive amounts of unstructured data to power critical AI applications.

As digital transformation accelerates and the volume of data increases, Palantir’s capabilities have become increasingly strategic for addressing challenges like predictive maintenance, fraud detection, and supply chain optimization.

In its latest earnings, Palantir delivered an impressive performance that showcased the strength of its platform strategy.

Revenue grew 27% year-over-year to $678 million, beating the estimates. Net income increased to $134 million, well above estimates of $83 million.

Perhaps most notably, commercial revenue was up a stellar 31% and now makes up over 40% of total sales.

This shows Palantir’s success in diversifying its customer base beyond government agencies to include more large enterprises.

As organizations across industries accelerate digital transformations, demand is surging for Palantir’s data integration and analytics services.

According to CEO Alex Karp, the company’s AI platform—which was launched just over a year ago—has already “transformed” Palantir’s business model.

By automating routine data tasks using machine learning, the platform frees up engineers to focus on higher-value work delivering customized solutions for clients. This is helping drive stronger revenue growth and fatter margins.

With digital data volumes exploding every day across every industry, the need for Palantir’s data integration and analytics capabilities will only intensify.

By continuously enhancing its AI technology, the company is cementing its position at the forefront of decision intelligence.

As long as Palantir maintains its track record of execution, the stock could have further room to run in this transformational growth story.

Best regards,

Joel Litman & Rob Spivey
Chief Investment Strategist &
Director of Research
at Valens Research