Could investing $10,000 in Palantir make you a millionaire?

Palantir Technologies (PLTR 0.99%) has been around for about 20 years, but the software-as-a-service company has only recently gained global attention thanks to its use of artificial intelligence (AI) to help its customers save time and money – and which has translated into significant profit growth.

Stock performance followed, with the stock rising triple digits over the past year. And Palantir stock received an additional boost in recent days with the announcement that it will join the S&P 500 index later this month. This represents a significant milestone as it shows that Palantir is one of the companies driving today's economy.

You may be wondering if you should buy this stock that is currently on the rise – and you may even be wondering if a sizable investment, say $10,000, could eventually make you a millionaire. Let's find out.

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Growth of Palantir’s commercial customers

First, let's look at Palantir's journey so far. Originally, the company generated most of its revenue through contracts with governments, but in recent years its commercial business has taken off. Palantir helps its customers aggregate all their data and use it to make often game-changing decisions—and AI is driving this process. This comprehensive platform can be used in many areas, from hospitals to restaurants to business offices. All of this has helped the company grow its number of commercial customers from just 14 four years ago to 295 last quarter.

Revenue from the U.S. government business still exceeds that of the U.S. commercial business, at $278 million versus $159 million. But the growth rate of the U.S. commercial business is more than double that of the U.S. government business, at 55% versus 24%. And the number of customers and the value of deals are growing at double and triple digit rates. So the commercial business represents an important growth area for Palantir.

In addition, Palantir has come up with an ingenious way to introduce customers to its Artificial Intelligence Platform (AIP), a product that only launched last year. Palantir offers a bootcamp program. At these extremely popular events—Palantir ran more than 660 of them in one quarter alone—potential customers learn how to apply AIP directly to their business. And these events often lead to new business immediately. Last quarter, Palantir closed a seven-figure deal with a wholesale insurance broker about two weeks after a bootcamp.

What drives growth?

According to Palantir, AIP is driving both new customer acquisition and business expansion with existing customers in the U.S. commercial business. The technology company also has a global presence and total revenue from public and commercial businesses, including international business, has grown by double digits in recent quarters.

All of this momentum helped Palantir post a record quarterly profit of $134 million last quarter. And the company's forecasts for the rest of the year are promising: It expects to post GAAP net income in every quarter and raises its revenue forecast. In fact, Palantir expects full-year U.S. revenue growth of as much as 47%.

Palantir's growth to date and the trends we're seeing in AIP and commercial revenue give us reason to be optimistic about the company, against the backdrop of a high-growth AI market that's forecast to exceed $1 trillion by 2030. Analysts are forecasting an 85% CAGR for Palantir over the next five years, so we may still be in the early stages of this 20-year-old company's growth story.

From $10,000 to $1 million?

Given this potential, Palantir shares could rise much further – even after recent gains. But could you become a millionaire by investing $10,000 in Palantir? I think that's unlikely. Even if Palantir stock rose by 10, your investment would be worth $100,000 – a great result, but a long way from the $1 million mark.

But that doesn't mean you should turn your back on Palantir. In general, a single stock won't make you a millionaire – and it's risky to put all your eggs in one basket and rely on just one player. Instead, it's a better idea to invest in several solid companies for the long term. In this context, I think Palantir can help You will become a millionaire over time and that is why it is a top growth stock to add to your portfolio now.