PLTR benefits from sovereign AI demand (strong growth/guidance) but carries significant political/reputational risk.

That's a direct quote from Palunteer CEO Alex Karp. And that was after his company just posted one of the best quarters in its history as a public company.

Uh we're going to take a closer look at Poundier. This is a company that has pretty much built this grow nar this growth narrative of its of of its business focused around AI and more importantly nations building their own AI solutions.

So in most recent quarter, quarter 2 of 2026, revenue was up 93% sitting at $ 1.94 billion and 19% sequential growth. Um this was this beat consensus of about $1.8 billion.

More importantly, the segment that was tied to kind of serenity AI was the US commercial revenue, which grew 149% year-over-year and 28% sequentially, sitting at roughly $764 million.

Now, it is also important to remember that it's not just US governments that are building AI solutions. Sometimes the US governments do kind of make partnerships with enterprises and other players.

So when you think of AI for the nation, it's not just the US government portion that you should be looking at. It's also important to look at that other enterprise place that is actually growing for uh this player.

Uh most recently we had a few recent announcement coming out from Palanteer. They made a partnership with um Nebius or or Nebius the Neocloud company to be able to increase the amount of AI solutions that they have so their customers can continue to also build more and more AI solutions.

After the recent earnings, Palunteer CEO did go on CNBC and mention the demand for AI serenity has unleashed and he expects the growth momentum to continue for at least another 18 months.

And with the recent innovations that we've seen in AI technology, I believe this can actually this timeline can be extended even more. I mean, we just had GPT6 Astra come out. We're seeing uh Meta Platforms release new models.

We're seeing Anthropic also expected to release new models. we see um Grock with open uh with um XAI releasing new models and as more solutions come into the play the more ways they can monetize this AI movement.

Uh most recent quarter management did raise their fullear 2026 revenue guidance to roughly 8.1 to$ 8.2 billion which will represent a 82% year-over-year growth rate. And this was up from the prior 7.7 billion range that they had before.

So adding a $500 million at midpoint really showcases that this is a company that is truly seeing the demand for AI.

Now obviously one of the big rare big bare cases for this company many would say is the valuation. Uh this is a company in the hundreds of billions of dollars in market cap sitting with a few billion dollars in revenue.

Regardless, this is a company that can definitely see and benefit from this AI story, especially as nations themselves try to build up more and more AI solutions.

Yeah, it's also interesting to think about kind of the role they're playing exactly in sovereign AI. You know, at their um AIPCON conference back in March of this year, Palunteer and Nvidia um unveiled uh what they called the sovereign AIOS reference architecture.

This is essentially a joint software blueprint that combines Palanteers platform with Nvidia's enterprise AI reference models and it's specifically designed for governments and large institutions that want to essentially you know stand up their own uh secure self-contained AI systems rather than renting that capability from a cloud provider.

Um, you know, NATO's communications and information agency granted Palunteers, you know, flagship deployment in the space, the Maven smart system, uh, full security accreditation on its classified network in June.

It's also in use by the US Department of Defense. There's individual member mil member militaries as well. They have a contract with Spain's armed forces.

Um, so this is kind of the concrete examples of how Palunteer is a player in sovereign AI. Now, obviously for anyone that follows this company, they have, you know, investors need to be aware of this.

There's significant, you know, reputational and political risk tied to the company's work. There's been a number of documented concerns about how their government defense tools are used in politically sensitive contexts around the world.

The business reality to understand if you are going to put cash to work in Palunteer is that they are deeply tied to politically contentious defense and intelligence work. And that creates real headline and contract renewal risk that a typical enterprise software company doesn't carry.

That has always been the case when it comes to uh investing in Palunteer. We're also seeing there are some players that are actually um you know resisting expansion of Palunteer's role in European defense infrastructure based on sovereignty grounds.

So we're seeing uh uneven adoption across the space.

Now Palunteer's growth is no longer just reliant on defense. they really have grown out two kind of distinct customer bases. Obviously, there's the defense and intelligence relationships that have been sort of back to the origins of of this company, but there's the newer wave of large enterprises on the other.

And that's where you're seeing also a lot of continued growth in the sovereign AI angle.

Obviously, governments that want control for national security reasons, but also corporations that want to avoid handing proprietary data to a model provider. And so Palunteer is essentially selling the software layer of sovereign AI, the platform, the control logic that customers use to keep their data and models under their own control.

That's what you should pay attention to if you're thinking about investing in this company on the sovereign AI angle.

Uh so this is pretty much what we're hearing across the map. Rachel, I'm pretty excited that we did this episode because similar kind of discussion um and phrasing was shared by Palanteer CEO and similar type of phrasing is shared by Nvidia CEO and other players that are also focusing in this AI space.

>> definitely Rachel so fools thank you for watching we took a closer look at three companies that can benefit from sovereign AI I we took a closer look at Palunteer, a big player in this space, one that's really focusing and and kind of a key player in the industry.