Palantir Technologies is leaning hard into the surging economics of AI usage, with its executives declaring that tokens, the basic unit of computation in large language models, have become the new fuel powering enterprise AI adoption.

On its first-quarter earnings call Monday, Chief Technology Officer Shyam Sankar highlighted record token consumption on the company’s Artificial Intelligence Platform (AIP), noting that rapidly falling costs are paradoxically driving higher usage rather than curbing it.

“Tokens are the new coal,” Sankar said. “AIP is the train.”

He invoked the Jevons paradox to explain the phenomenon: “When the Victorians built more efficient steam engines, everyone assumed coal consumption would fall. Instead, it skyrocketed.”

This dynamic is playing out in real time at Palantir. As the cost per token drops, customers are deploying AI more aggressively across their operations, burning through far more tokens than expected. For Palantir, this translates into accelerating platform usage and stronger revenue momentum.

However, Sankar was quick to draw a firm boundary. Palantir is deliberately positioning itself as a “no slop zone,” pushing back against the industry tendency toward flashy but low-value AI experiments.

“More tokens means more slop,” Sankar said, criticizing the practice of “tokenmaxxing” — maximizing usage for its own sake rather than driving measurable business outcomes.

This disciplined approach appears to be resonating with customers. Palantir posted robust first-quarter results and significantly raised its full-year outlook, reinforcing its status as one of the clearest winners in the enterprise and government AI software market.

Strong Results Across the Board

For the quarter ended March 31, Palantir reported revenue of $1.63 billion, beating Wall Street expectations of $1.54 billion. Adjusted earnings per share came in at 33 cents, ahead of the 28 cents forecasted.

Growth was particularly impressive on the commercial side, with U.S. commercial revenue exploding 133% year-over-year to $595 million. U.S. government revenue rose 84% to $687 million, helping drive overall revenue up 85% to $1.6 billion. U.S. revenue doubled to $1.28 billion.

CEO Alex Karp struck a bullish tone in his letter to shareholders. He said: “The United States remains the center, the constant core, of our business. And that business is erupting.”

Buoyed by demand, Palantir raised its fiscal 2026 revenue guidance to $7.65–$7.66 billion, up from the prior range of $7.18–$7.20 billion. It also increased its U.S. commercial revenue target to more than $3.22 billion. For the second quarter, the company expects revenue between $1.797 billion and $1.801 billion, comfortably above consensus estimates of $1.68 billion.

Palantir’s government business continues to benefit from the growing role of AI in modern warfare. Its Maven AI system, which supports data analysis and real-time targeting decisions, became an official “program of record” for the Pentagon in March — a designation that locks in long-term funding and institutional adoption across the U.S. military. The company also recently secured a $300 million contract with the U.S. Department of Agriculture.

On the commercial front, enterprises are increasingly turning to Palantir’s platforms to integrate disparate data sources and automate complex operational decisions. The combination of sticky government contracts and accelerating commercial wins has created a powerful dual growth engine.

While many AI companies are chasing raw usage volume, Palantir is betting that customers ultimately want reliable, high-impact systems rather than experimental demos. By focusing on practical deployments and warning against “AI slop,” the company is trying to build a reputation for quality and ROI in a market increasingly flooded with hype.

This approach seems to be paying off. Palantir’s ability to deliver tangible results for large organizations, particularly in complex environments like defense, intelligence, and heavy industry, sets it apart from pure-play AI model providers and more generic software vendors.

Palantir has come a long way from its early days, focused primarily on government intelligence work. It is now firmly established as a major player in the enterprise AI space, with a growing commercial book and a defensible position in high-stakes national security applications.

As token consumption continues to surge and AI becomes more deeply embedded in organizational workflows, Palantir’s “no slop zone” philosophy could prove to be a significant competitive advantage, helping it win and retain customers who are growing weary of flashy but ineffective AI experiments.

U.S. stock futures were little changed late Monday after a broad market selloff driven by renewed fears that tensions in the Middle East could spiral into a deeper regional conflict, threatening global energy supplies and reigniting inflation concerns across financial markets.

Futures tied to the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 all hovered near flat levels in overnight trading, suggesting investors were attempting to stabilize sentiment after a volatile regular session in which geopolitical anxiety overshadowed otherwise resilient corporate fundamentals.

The muted overnight moves followed a sharp decline on Wall Street Monday, with the Dow Jones Industrial Average falling 557.37 points, or 1.13%. The S&P 500 lost 0.41%, while the Nasdaq Composite slipped 0.19%, outperforming broader indexes as investors continued rotating toward technology and artificial intelligence-linked companies viewed as relatively insulated from geopolitical shocks.

The latest wave of volatility was triggered after the United Arab Emirates accused Iran of launching missile and drone attacks against the Gulf state, further straining an already fragile ceasefire framework involving Tehran and Washington.

The renewed confrontation revived fears that the conflict could once again disrupt shipping routes and oil infrastructure across the Gulf, particularly around the Strait of Hormuz, the critical maritime chokepoint through which roughly one-fifth of global oil supplies move.

The U.S. military added to the tension after reports emerged that American naval forces had engaged Iranian vessels near the strait. Adm. Brad Cooper, commander of U.S. Central Command, said American forces had “eliminated six small Iranian boats” that were allegedly attempting to interfere with commercial shipping operations.

Iranian state media denied the claims, underscoring the fog of information surrounding the rapidly evolving conflict. The geopolitical uncertainty initially pushed oil prices higher during Monday’s regular trading session, amplifying investor concerns that prolonged instability in the Gulf could deepen the ongoing global energy shock already tied to the war.

However, crude prices eased slightly in extended trading, with U.S. West Texas Intermediate crude futures falling about 1% to $105.39 a barrel, suggesting traders remain uncertain about whether the latest escalation will materially worsen supply disruptions in the near term.

However, analysts warn that energy markets remain extremely vulnerable to sudden spikes, particularly if attacks intensify around shipping infrastructure or if Hormuz remains partially constrained for an extended period.

The market reaction highlighted a broader tension currently shaping global investing: whether the enormous momentum behind artificial intelligence, strong corporate earnings, and resilient consumer demand can continue to offset mounting geopolitical and macroeconomic risks.

So far, many investors appear to believe the answer is yes. Morgan Stanley Wealth Management’s head of market research and strategy, Dan Skelly, argued Monday that markets have increasingly learned to treat geopolitical flare-ups as temporary disruptions rather than long-term structural threats.

“You’ve seen this pattern before where — last year in April, with Liberation Day — big sell-off, big recovery,” Skelly said on CNBC’s “Closing Bell: Overtime.”

“Now with the war in the Middle East, it’s almost like the market is treating geopolitics and some of these domestic policy shocks like pop-up ads along a longer, winding narrative centered on AI, the economy and resilient earnings,” he added.

That assessment indicates how dramatically investor psychology has shifted over the past year. While wars, inflation spikes, and trade disruptions continue to generate short-term volatility, capital markets remain heavily focused on the AI investment cycle, which is driving unprecedented spending on data centers, semiconductors, cloud computing, and digital infrastructure.

Technology companies tied to artificial intelligence have become the market’s dominant growth engine, helping support major indexes even as geopolitical tensions intensify. The Nasdaq’s relatively smaller decline on Monday compared with the Dow reflected that dynamic. Investors continued to gravitate toward megacap technology names viewed as beneficiaries of the AI boom, while economically sensitive sectors tied to industrial activity, transportation, and consumer spending faced heavier pressure.

At the same time, the conflict’s inflationary implications remain a growing concern for policymakers and investors alike. Rising oil prices threaten to complicate the Federal Reserve’s efforts to maintain progress on inflation while supporting economic growth. Higher fuel costs can quickly ripple through transportation, manufacturing, and consumer goods pricing, raising fears of a second inflation wave at a time when borrowing costs remain elevated.

That backdrop makes this week’s economic data especially important. Investors are closely watching Tuesday’s release of the U.S. trade deficit report and the latest Job Openings and Labor Turnover Survey, commonly known as JOLTS, for signs of whether the labor market and broader economy remain resilient under mounting geopolitical pressure.

Corporate earnings will also remain in focus, with major companies including Pfizer, DuPont, PayPal, HSBC, Anheuser-Busch InBev, Marathon Petroleum, Duke Energy, and Shopify scheduled to report results before Tuesday’s opening bell.

Those earnings reports are expected to provide further insight into how companies are navigating an increasingly complex operating environment shaped by war-driven energy volatility, supply chain uncertainty, and continued heavy investment in AI infrastructure.

His Excellency, President Bola Ahmed Tinubu, has graciously granted four patents we filed locally for our upcoming securities exchange, Contisx Securities Exchange Plc. We are also pursuing corresponding global patents to ensure proper protection of the intellectual capital behind this mission. This is not an aggressive IP posture, but a necessary step to safeguard the innovations we are building.

At Contisx, we have developed new protocols tailored to the African context, reimagining how capital markets can drive investment inclusion and accelerate shared prosperity. These innovations are being translated into new technology and process stacks designed for scale, access, and efficiency.

One of the granted patents is titled: “System and Method for Bilateral Negotiation-Based Electronic Trading of Heterogeneous Financial Instruments with Automated Matching and Custodied Settlement.”

We believe this framework addresses a foundational challenge within our markets and will contribute meaningfully to their evolution especially at the “Main Street”, not just the “Wal Street” level in Africa.

Mr. President, we are grateful for the grant of these rights. Additional applications are in progress as we continue to build with focus and urgency.