Over the last two years, Palantir has turned into a high-profile way to bet on the mix of military technology, artificial intelligence and government contracts, attracting both fans and critics. Now that co-founder Peter Thiel is preparing to sell a stake worth hundreds of millions of dollars, investors are asking whether this is just profit-taking after a huge rally, or an early signal that expectations around the stock have run too far ahead of fundamentals.

The planned sale does not automatically mean Palantir’s growth story is over, especially as the company is still reporting strong revenue expansion, improving profitability and growing demand for its AI platforms from both governments and commercial clients. Instead of focusing only on how many shares Thiel wants to sell, it is more useful to look at how Palantir actually makes its money, how sustainable its margins and growth are, what today’s valuation implies for future performance, and where the line lies between a genuine…