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  5. MISC: Palantir CEO Alex Karp on Monday characterized his company’s performance using a simple rule that has historically boded well for tech stock returns. [Miscellaneous]

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Q: Palantir CEO Alex Karp on Monday characterized his company’s performance using a simple rule that has historically boded well for tech stock returns.

Karp said in a release that the company’s score with the “Rule of 40” was a 94%


Rule of 40 says that the sum of the revenue growth rate and the profit margin should be 40% or higher.

Do you use this?

How can an average investor measure & use it?

Can it be used on all stocks [company's]?

Thank you.

Asked by Ross on August 11, 2025
5i Research Answer:
It could be used on any company technically but it typically applies mostly to software...
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