Palantir just sank 8% after its latest earnings report.

That might not surprise anyone who’s followed the company.

Palantir has always been one of tech’s most polarizing names.

Some hail it as the future of AI-driven decision-making. Others call it an overhyped, overvalued firm built on government contracts and secrecy.

So what is Palantir really? How does it make its money? And is it a stock worth owning?

Let’s dig in.

The Mystery Around Palantir

Since its founding in 2003, Palantir has been wrapped in secrecy.

The company’s first clients were intelligence and defense agencies – including the CIA and Department of Defense – which meant Palantir couldn’t talk publicly about what it was doing.

That secrecy gave rise to a mythology.

Palantir became known as a “spy tech” company, the kind of shadowy Silicon Valley player whose software powered surveillance programs and military missions.

It didn’t help that one of its founders is Peter Thiel, a billionaire investor known for backing controversial causes.

Or that the company’s name comes straight out of The Lord of the Rings – the “palantíri” were magical seeing stones used to spy on distant lands.

But as Palantir has expanded beyond defense, the company has tried to shed that image.

In a blog series called Palantir Explained, it laid out what it actually does – and what it doesn’t.

The key point: Palantir is not a data broker or a surveillance company.

It doesn’t collect, sell, or share personal data.

Instead, it builds software platforms that help organizations make better decisions with the data they already own.

So What Does Palantir Actually Sell?

Think of Palantir as a company that sells software for decision-making.

Its software helps large organizations connect, clean, and use their own data without replacing all their existing systems.

That’s what makes it valuable.

Most companies (and governments) have messy data that’s scattered across hundreds of incompatible databases.

Palantir’s software sits on top of those systems and links everything together – turning raw data into usable insights.

The company’s main platforms are:

• Gotham, built for defense and law enforcement agencies. It helps analysts connect dots across huge datasets to identify patterns, relationships, or threats.

• Foundry, designed for commercial clients like healthcare providers, manufacturers, and energy companies. It helps them forecast demand, monitor supply chains, and optimize operations.

Foundry and Gotham are similar.

They both ingest data and offer people a platform to work with it.

The main difference is the source of that data.

Gotham is designed for government and law enforcement agencies, taking in crime reports, FBI intelligence, or even subpoenaed data.

Anything the agency already has access to is fair game.

Remember, Palantir doesn’t collect or provide data itself.

Once loaded, Gotham can instantly map out connections between people, places, and events.

A government analyst can see who’s in a suspect’s network, what links them together, and view every related piece of intelligence in one place.

Foundry, on the other hand, is Palantir’s commercial platform used by many Fortune 500 companies.

It helps businesses integrate fragmented data from across departments – finance, logistics, supply chains, operations – into one cohesive system.

Instead of running a dozen disconnected dashboards, Foundry allows users to see everything in one place and run real-time analytics without writing a single line of code.

And its reviews are stellar:

"We had a great chassis of the car. But our engine was underpowered. So we went to Palantir because we want to have the best engine out there...In three months, [the teams] built what took us three years before." – Heineken

"We deployed Chime late last year…we’ve already saved almost 300 delays, 20 cancellations...this represents millions of dollars of cost avoidance." – United Airlines

"Palantir is going to be front and center for everything that we do…[the platform] is a strategic differentiator for us." – Tampa General Hospital

In short: Palantir sells powerful, complex software. Not access to data.

Why is Palantir So Misunderstood?

Much of Palantir’s problem comes down to perception.

The company built its reputation in secrecy, working with the CIA, the Department of Defense, and other intelligence agencies.

That early image stuck. Even today, many still think of Palantir as a “spyware” company.

In reality, its software now powers everything from hospitals to breweries to airlines.

But old impressions die hard.

The other half of Palantir’s reputation problem comes from its CEO, Alex Karp.

Karp is one of the strangest and most outspoken executives in Silicon Valley.

He doesn’t own a car or a phone. He lives in New Hampshire, far from Palantir’s headquarters. He practices tai chi in the woods. He’s a philosopher by training, not an engineer. And he has a tendency to say exactly what he thinks – often in ways that make investors squirm.

In a CNBC interview last year, Karp said,

“I love burning the short sellers. Almost nothing makes a human happier than taking the lines of cocaine away from these short sellers, who… love pulling down great American companies so they can pay for their coke.”

That kind of unfiltered candor has made him polarizing.

Some admire his blunt honesty. Others see him as erratic or even arrogant.

He’s also unusually political for a tech CEO.

Because Palantir works closely with the U.S. military and law enforcement, critics have labeled him a right-wing executive aligned with Peter Thiel, Elon, and Trump.

But Karp rejects that label.

On CNBC just yesterday, he called himself “progressive,” arguing that today’s political left no longer represents true progressivism.

In a way Karp’s personality mirrors Palantir itself: brilliant, contrarian, and easy to misunderstand.

The company’s software is undeniably powerful. But that same power, paired with its outspoken CEO and its defense roots, makes people uneasy.

Should It Go in the Million Mission Portfolio?

Not yet.

There’s no question Palantir builds some of the most advanced software in the world.

Few companies have a product so deeply embedded in both national defense and Fortune 500 boardrooms.

But the problem isn’t the product. It’s the price.

Even after yesterday’s drop, Palantir trades at more than 450x earnings and 100x sales.

Those are sky-high levels – even for a company forecasted to grow 30% a year.

So while I admire Palantir’s technology, I’m staying on the sidelines for now.

The story is fascinating. But the stock isn’t compelling at this price.

If the valuation ever reflects that reality it might earn a spot in The Million Mission portfolio down the road.

For now, it’s a powerful but polarizing company best watched from a distance.