Is Palantir Stock Halal?

Palantir builds data integration and analytics software: Gotham for government and defense customers, Foundry for commercial enterprises, and AIP, its artificial intelligence platform that has driven explosive recent growth. Fiscal 2025 revenue reached $4.48 billion, up 56% year over year, with fourth-quarter growth of 70%: numbers almost no software company of this size posts. The split matters for screening. Government customers contributed roughly $2.4 billion (54% of revenue), of which $1.86 billion came from the U.S. government and $547 million from allied foreign governments. Commercial customers contributed $2.07 billion (46%), and U.S. commercial revenue more than doubled during the year. Selling software is permissible in itself: writing code, integrating data, and licensing platforms breaks no Shariah rule. Palantir produces no alcohol, runs no gambling operations, lends no money, and streams no entertainment. The two compliance questions are narrower: the interest its cash hoard generates, and what some of its government customers do with its software.

Palantir's balance sheet holds more than $6 billion in cash and short-term investments, mostly U.S. Treasury securities, and that pile produced $229 million of interest income in fiscal 2025, up from $197 million the year before. Measured against $4.48 billion in revenue, interest alone comes to 5.12%, which nudges Palantir past the 5% AAOIFI threshold and into the questionable band before the defense debate even begins. This is worth pausing on, because it is unusual: most technology companies with large treasuries (Meta, Alphabet, Nvidia) generate revenue so large that their interest income stays well below 1% of it. Palantir's revenue base is still comparatively small relative to its cash position, so the ratio runs hot. It is also a moving target in a favorable direction: with revenue guided to roughly $7.2 billion for fiscal 2026 (61% growth), the denominator is growing much faster than short-term interest earnings can, and the interest ratio could fall back below 5% within a year or two if the cash is deployed or growth holds. Investors should recheck this ratio each quarter rather than assume it is static.

Palantir's government work is where screeners diverge, and honesty requires saying plainly that the data to settle the question does not exist in public filings. Palantir reports government versus commercial revenue, but it does not break out defense and intelligence contracts from civil ones: the same segment contains Army battlefield software and Department of Defense AI contracts alongside work for health agencies, tax authorities, and pandemic response programs. Screeners handle this differently, which is why Zoya publishes "questionable" and Musaffa publishes "doubtful" rather than a clean pass or fail. One scholarly view holds that software and analytics services sold to governments, including militaries, are permissible: Palantir manufactures no weapons, and providing technology to a state's defense apparatus is not among the enumerated prohibitions. A stricter view treats revenue that directly enables combat operations or surveillance as tainted regardless of whether hardware is involved. We have not invented a defense revenue estimate, because any number we assigned would be a guess. Instead we flag the issue: investors following the stricter position should assume a materially higher impure share than our interest-only 5.12% and lean toward avoiding the stock.

Palantir lands in the questionable band by the numbers and stays there on qualitative review, so the practical guidance depends on your screening posture. Investors who accept the permissibility of government software work can treat Palantir like any borderline stock: hold with monitoring, purify at $5.12 per $100 invested, and watch two lines each quarter: interest income relative to revenue (currently just above the threshold, likely to fall as revenue compounds) and the government share of the business (currently 54%, drifting down as U.S. commercial growth outpaces it). Investors who follow scholars that prohibit enabling military and intelligence operations should avoid Palantir outright, since more than half of revenue flows from government customers and the defense-heavy share of that cannot be verified. Two further cautions apply. Valuation is extreme by any historical software benchmark, which is an investment risk even where compliance is settled. And Palantir's work for immigration enforcement and military targeting draws recurring ethical objections that some Muslim investors weigh independently of formal screening. As with all borderline cases, consult a qualified Shariah advisor for a personal ruling.