PLTR at ~75x sales: how do you underwrite a switching-cost moat that a government is actively trying to test?

Palantir's at roughly $430bn, about 75x trailing sales, \~53x on 2026 guidance of $8.15bn. FY25 revenue was $4.475bn, up 56%. Q2 2026 was up 93%, the fastest in company history. The top twenty customers each spent about $93.9m, up from $64.6m the year before, so the biggest accounts are expanding around 45% a year.

You can't justify that multiple on growth alone. You need to believe the revenue is unusually durable, which means believing the moat is real.

The moat argument is switching costs, and it's more specific than most software lock-in. Palantir doesn't sell a reporting layer over existing systems. They build what they call an Ontology, a formal model of what an organisation's objects are and how they relate, constructed by engineers working on site, and operational decisions then run through it. Nobody keeps a parallel copy, because the model *is* the product. So replacement isn't migration, it's reconstruction.

If that's true, retention should be near-total and net expansion should stay high, which is roughly what the customer numbers show.

What I’m still trying to figure out is... The NHS is the cleanest live test of that thesis. Palantir signed a £330m seven-year contract in 2023 with a break clause in 2027. As of January, 110 trusts were live or in delivery. In June a cross-party parliamentary committee recommended the government exercise that break clause. Separately, many of the largest English hospital trusts still hadn't adopted it despite central pressure.

So you have a customer with political motivation to leave, a contractual mechanism to leave, and a segment that never joined. If the moat holds there, it holds anywhere. If it doesn't, the multiple is resting on something softer than it looks.

My own view: I think the switching-cost argument is real but the market is pricing it as permanent when it's actually contingent on nobody testing it hard. 2027 is the test.

Disclosure, the video's mine and covers this in more depth: [https://www.youtube.com/watch?v=ldFcwL3vn1Y](https://www.youtube.com/watch?v=ldFcwL3vn1Y). Happy to discuss further.