Palantir’s Revenue Jumps 85% to $1.63B, but CEO Karp Warns AI Industry Is Headed for Nationalization

Alex Karp is not one to mince words, and this week he took direct aim at the artificial intelligence industry his own company helps power. The Palantir chief executive predicted that leading AI firms could face partial nationalization within two years, arguing that current proposals for a 50% state stake will later be seen as moderate. The warning came alongside a blistering critique of rivals OpenAI and Anthropic, whom he accused of prioritizing theoretical benchmarks over real-world business needs — a practice he dubbed “tokenmaxxing.”

Yet for all the fire directed outward, Palantir’s own numbers tell a starkly different story. Revenue in the first quarter of 2026 surged 85% year over year to $1.63 billion, easily beating analyst expectations. Earnings per share came in at $0.33, ahead of the consensus $0.28 estimate. The company has guided for full-year 2026 revenue between $7.65 billion and $7.66 billion. But the stock has gone nowhere good: trading at roughly €112.58 to €112.82, Palantir shares have lost more than 21% since January and sit well below the 200-day moving average of €137.86.

The disconnect stems partly from macro pressure. US inflation data for May hit 4.2% — the highest reading in three years — fueling fears that interest rates will stay elevated longer than expected. That is a brutal headwind for high-multiple stocks, and Palantir’s price-to-earnings ratio still towers above 140. The relative strength index, at around 41, suggests neutral-to-weak momentum despite the underlying operational beat.

Karp’s critique of the broader AI landscape goes beyond nationalization. He argues that large language model providers are so consumed with maximizing token throughput that they neglect the granular accuracy enterprises require. “Corporate customers are screaming in frustration,” he said in an interview. Palantir’s own AI platform, AIP, is positioned as the integration layer that makes probabilistic models reliable for mission-critical use cases. Karp dismissed much of what Anthropic publicly showcases, noting that it already runs on Palantir’s infrastructure.

Should investors sell immediately? Or is it worth buying Palantir?

The company is simultaneously tightening its own belt. According to the 2025 annual report, Palantir employed roughly 4,400 full-time staff. Karp has set a target to cut that to 3,600 — even as revenue grows — relying on AI tools to boost per-employee productivity to the point that new hires become unnecessary.

On the expansion front, Palantir is pushing into new verticals. A partnership with law firm Kirkland & Ellis will build an AI platform for private-equity fundraising; Kirkland is committing $500 million to its own AI capabilities, signaling a shift from hourly billing to task-based pricing. In the UK, regional chief Louis Mosley is defending Palantir’s growing involvement with the National Health Service and the Ministry of Defence, while the company also challenges a veto by the London mayor that blocked its collaboration with the Metropolitan Police. The NHS contract under review is valued at £441 million.

Despite the stock’s slide, several analysts remain bullish. Baird rates Palantir as “outperform” with a $200 price target, citing the vendor-agnostic approach and rising free cash flow. Wedbush lifted its target to $230 after the Google Cloud partnership announcements, and both projections sit far above current levels. Whether the market eventually agrees will depend heavily on how the interest-rate debate unfolds in Washington over the coming weeks — and whether Karp’s grim vision for his own industry comes to pass.