Could Investing $10,000 in Palantir Make You a Millionaire?

Palantir Technologies (NYSE: PLTR) has been around for about 20 years, but the software-as-a-service company only grabbed the world's attention in recent times. This is thanks to its use of artificial intelligence (AI) to help its customers save time and money -- and how this has translated into major earnings growth.

Share performance has followed, with the stock climbing in the triple digits over the past year. And Palantir stock got an extra boost in recent days with the announcement that it would join the S&P 500 Index later this month. This represents a significant milestone as it shows Palantir is one of the companies powering today's economy.

So, right now, you might be wondering if you should buy this on-the-move stock -- and you may even wonder if a sizable investment, such as $10,000, could make you a millionaire down the road. Let's find out.

Image source: Getty Images.

Palantir's commercial customer growth

First, let's consider Palantir's path so far. The company originally generated most of its sales through contracts with governments, but in recent years, its commercial business has taken off. Palantir helps its customers aggregate all of their data and use it to make often game-changing decisions -- and AI powers the process. This broad platform can be applied in many settings, from hospitals to restaurants and business offices. All of this has helped the company grow its number of commercial customers from only 14 four years ago to 295 in the most recent quarter.

U.S. government revenue still surpasses U.S. commercial -- at $278 million versus $159 million, respectively. But the growth rate of U.S. commercial is more than double that of U.S. government at 55% versus 24%. And customer count and deal value are climbing in the double and triple digits. So, the commercial business represents a key growth area for Palantir moving forward.

On top of this, Palantir has come up with a genius way of introducing customers to its Artificial Intelligence Platform (AIP), a product launched just last year. Palantir offers a bootcamp program. During these immensely popular events -- Palantir conducted more than 660 in one quarter alone -- potential customers see how they can apply AIP directly to their businesses. And these events often result in new business right away. In the latest quarter, Palantir closed a seven-figure deal with a wholesale insurance broker about two weeks after a bootcamp.

What's driving growth

Palantir says AIP is driving both new customer signups as well as deal expansions from current customers in the U.S. commercial business. The technology company also is present worldwide, and overall government and commercial revenue, including international business, has advanced in the double digits in recent quarters.

All of this momentum helped Palantir report a record quarterly profit of $134 million in the most recent period. And the company's forecasts for the rest of the year are bright, with expectations of GAAP net income in every quarter and increases to revenue guidance. In fact, Palantir expects U.S. commercial revenue growth of as much as 47% for the full year.

Palantir's growth so far and the trends we're seeing in AIP and in commercial revenue are reasons to be optimistic about the company -- and this is set against a backdrop of a high-growth AI market, one forecast to reach more than $1 trillion by 2030. Analysts predict an 85% annual growth rate for Palantir over the coming five years, so we could be in the early days of this 20-year-old company's growth story.

From $10,000 to $1 million?

Considering this potential, Palantir shares could have much farther to go -- even after recent gains. But could investing $10,000 in Palantir make you a millionaire? I think this is unlikely. Even if Palantir stock increased by 10, your investment would be worth $100,000 -- a great result, but far from the $1 million mark.

But this doesn't mean you should turn your back on Palantir. Generally, one stock alone won't make you a millionaire -- and it's risky to put all of your eggs in one basket and count on just one player. Instead, it's a better idea to invest across several solid companies for the long term. In this context, I think Palantir may help you become a millionaire over time, and that's why it's a top growth stock to add to your portfolio now.

Should you invest $1,000 in Palantir Technologies right now?

Before you buy stock in Palantir Technologies, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palantir Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $716,375 !*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of September 9, 2024

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy .