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Palantir keeps beating Wall Street's expectations while trading at a valuation that makes most analysts flinch, and the tension between those two realities is exactly what makes its next move so hard to predict.

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Few names on the market divide investors quite like Palantir. The nine consecutive quarters of EPS beats, the 155% Rule of 40 score, and the AI sovereignty narrative make it a fundamentals story. The P/E near 247x makes it a valuation debate. Our 24/7 Wall St. price target tries to adjudicate that tension with math rather than opinion.

Palantir (NASDAQ:PLTR | PLTR Price Prediction) currently trades at $172.24. Our 24/7 Wall St. price target for Palantir is $184.84 over the next 12 months, implying 7.38% upside. Our recommendation is buy with high confidence at 90%.

24/7 Wall St. Price Target Summary Metric Value Current Price $172.24 24/7 Wall St. Price Target $184.84 Upside 7.38% Recommendation BUY Confidence Level 90% Choppy Price Action With Fundamentals Still Accelerating PLTR has cooled recently, falling 7.54% over the past week but still up 8.71% over the past month and 10.31% over the past year. Shares sit roughly 8% below the $207.52 52-week high, well above the $106.37 low.

Q2 FY2026 was extraordinary: revenue of $1.935 billion, up 92.83% year over year, EPS of $0.41 versus the $0.28 estimate, and U.S. commercial revenue growing 149%. Management raised FY2026 revenue guidance to $8.150 to $8.158 billion, the largest full-year raise in company history.

Why Bulls See a Path to $213 Our bull case one-year price target is $213.34, implying 23.94% upside. The drivers are visible in the earnings report. U.S. commercial TCV bookings hit $2.132 billion, up 153% year over year, and net dollar retention climbed to 157%.

CEO Alex Karp said, “I am driving the business to grow at a rate equal or above to what we have in U.S. commercial for the next 18 months.” If AIP adoption keeps compounding and sovereign AI wins accelerate, forward EPS re-rates higher, and the target rises with it.

What Could Go Wrong Our bear case lands at $158.11, an 8.15% decline. The starting problem is valuation: a trailing P/E of 247x and P/FCF near 191x leave little room for a growth deceleration. Stock-based compensation was $265 million in Q2 alone, a real dilution drag.

Bulls would counter that heavy SBC funds the forward-deployed engineering talent that just closed 73 deals of $10 million or more. Insider activity is net selling across recent transactions, though executive selling at these price levels is typically routine.

How Palantir Compares to Snowflake, Salesforce, and C3.ai Snowflake (NYSE:SNOW) is the closest AI-platform valuation contrast. SNOW trades at a P/B of 61 with a P/FCF of 104, still growing product revenue 37% year over year, but PLTR’s 92.83% growth and GAAP profitability justify a fatter multiple.

Salesforce (NYSE:CRM) is the mature comp: a P/E of 29, 10.83% revenue growth, and a 34.3% non-GAAP operating margin. CRM sets the floor: this is what AI software valuations look like once growth normalizes.

C3.ai (NYSE:AI) is the cautionary comp, with revenue down 25.46% year over year and a market cap of just $1.59 billion. The peer spread makes our 24/7 Wall St. price target look reasonable: rich versus CRM, cheaper than SNOW on growth-adjusted terms, and worlds away from AI’s execution problems.

Company Revenue Growth YoY Operating Margin Palantir 92.83% 31.59% Snowflake 35.09% -30.64% Salesforce 10.83% 21.47% C3.ai -25.46% -194.86% Palantir Price Prediction 2026-2030 Our 24/7 Wall St. price target of $184.84 and buy rating rest on one tipping factor: Palantir is the only richly-valued AI software name delivering both hypergrowth and GAAP profitability.

The bull thesis strengthens if U.S. commercial growth stays above 100% into Q4. The bear thesis gains traction if net dollar retention slips below 140% or bookings decelerate meaningfully. For long-term holders, the setup still favors patience over exit.

Year 24/7 Wall St. Price Target 2026 $184.84 2027 $184.32 2028 $192.31 2029 $208.94 2030 $214.71 These projections assume Palantir continues executing on AIP adoption and sovereign AI wins at roughly current trajectories. Significant upside or downside could come from federal budget shifts, AI regulatory action, or a broader software multiple reset.

Contact [email protected] for any questions or corrections.

Concern is being raised about Palantir’s work with the NHS as new figures showed tens of thousands of patients have withdrawn their data from use in research projects.

James Frith, the health innovation minister, said he was worried about “mistrust” of the US defence and health tech company and “the impact it could have on people’s willingness to share data with the NHS”.

The government is deciding whether to axe the company’s £330m contract to operate the health service’s federated data platform, which is intended to improve efficiency and patient outcomes.

Frith’s comment, in a letter to Layla Moran, the chair of the Commons health committee, follows a rise in patients opting out of allowing their medical data to be shared. In the two months from mid-May to mid-July, 60,000 more people withdrew their private information under a mechanism called the national data opt-out.

Doctors and patients’ groups are calling for Labour to exercise a break clause in Palantir’s seven-year contract. They cite its work with the Israeli military and Donald Trump’s ICE immigration agency and question the company’s claim to provide value for money.

Palantir and its supporters say its AI-driven technology has cut NHS waiting lists for surgery. A spokesperson for the company said it was “helping to deliver better care, with trusts using it recording 110,000 additional operations, a 15% reduction in discharge delays for long-stay patients and a 6.8% improvement in the number of people finding out whether or not they have cancer within 28 days”.

NHS England has reported similar numbers but said it could not “draw conclusions about cause and effect”. The government’s statistics watchdog is investigating the data.

Frith told Moran there had been an increase in NHS data opt-outs, in line with media interest in Palantir’s position.

Palantir’s government contracts have been beset by controversy. Ministers apologised after it emerged that the company’s staff had access to identifiable patient data.

London’s mayor, Sadiq Khan, has also blocked the Metropolitan police from awarding Palantir a £50m contract to use its AI to support investigations. He said Londoners wanted to see public money paid only to companies that “share the values of our city”. Palantir is suing over the mayor’s decision.

Frith said the rise in opt-outs was “modest” but would still be monitored. Opting out does not stop an individual’s records from being used for direct care, such as live operations. However, it prevents it being used for research and planning.

Frith said: “It may not be possible to realise the benefits of the 10-year health plan if patients stop sharing their data.”

Foxglove, a tech equity campaign, welcomed the minister’s acknowledgment of apparent public mistrust of Palantir. “Doctors and patients have been warning about the threat this poses to NHS care, and tens of thousands of people have opted out in just the last few months,” said Tom Hegarty, its head of communications.

“People are right to be concerned given … its founder, Trump ally Peter Thiel, going on record to opine that the NHS makes people sick.”

Frith indicated a policy shift on whether the Palantir-powered platform must be used by NHS trusts. In July, a health minister told parliament that health trusts would be told they “must use” parts of NHS England’s federated platform, which is controlled using Palantir technology. Now Frith has said “there is no requirement to use the FDP” and they may “prefer an alternative”.

Moran, who is a Liberal Democrat MP, said she welcomed the “softened stance” on whether adoption of the FDP was mandatory but added: “We remain of the view that the government should switch provider and not extend the current contract. Given how long this process could take, ministers need to act decisively and quickly, and not put this decision off until February.”

Michael Burry is going after Palantir Technologies (PLTR -4.49%) again. The investor of The Big Short fame laid out an accounting case against the artificial intelligence (AI) software specialist in a February post titled "Palantir: An Accounting."

This week he pressed the case again, arguing that Palantir's financial profile looks more like a consulting firm's than a software platform's. He says a company valued around $420 billion today could eventually be worth less than $100 billion.

He has had money behind the view. His Scion Asset Management disclosed put options on 5 million Palantir shares last fall. That was its final filing before he wound the fund down, and he told subscribers in April that he still holds Palantir puts.

Palantir stock, meanwhile, fell almost 6% on Wednesday, jumped 7.7% on Thursday (the same day the company and consulting giant PwC announced an expanded enterprise AI alliance), and traded near $174 as of this writing, down more than 4%.

Burry's case rests on numbers in Palantir's own filings, so that is where I checked it.

Image source: Getty Images.

The receivables are growing faster than salesIn nine of the last 12 quarters, Burry wrote in February, Palantir's accounts receivable (the money customers owe for work already billed) grew faster than its revenue. He argued that a pattern like that can point to channel stuffing, aggressive revenue recognition, or payment terms stretched to win deals.

The newest numbers don't break the pattern. Receivables stood at $1.49 billion at the end of June, up from $1.04 billion at the end of 2025 -- 43% growth in six months, against 38% growth in quarterly revenue over the same stretch. And the build is speeding up. It cut $434 million from operating cash flow in the first half, versus $164 million a year earlier.

Notably, Palantir itself offers an explanation. The company says in its June-quarter filing that it has been shifting away from collecting several years of payments up front and toward billing annually or even in arrears, meaning after the work is done.

That is a legitimate business choice. It is also exactly how a consulting firm gets paid.

One customer owes about $400 millionThe filing also discloses that a single customer, identified only as Customer I, represented 27% of receivables at the end of June, up from 25% at the end of 2025. That works out to roughly $400 million owed by one customer.

However, no customer accounted for more than 10% of revenue in the first half -- about $357 million at most. In other words, one customer appears to owe Palantir more than it could have recognized in revenue from any customer all half.

That isn't proof of anything improper. A large government-related account may simply pay slowly, or billing may run ahead of schedule. But it is an unusual shape for a software company, with revenue spread across many customers and collection risk concentrated in one.

Does Palantir collect like a consultant?Burry's sharpest comparison is a ratio. A subscription software company typically bills customers up front, so cash arrives before the revenue does and piles up on the balance sheet as deferred revenue. A consulting firm earns the revenue first and collects later. Salesforce, for example, carried $18.8 billion of unearned revenue in its most recent quarter -- more than one and a half times its $11.3 billion of quarterly revenue. At Accenture (ACN -3.31%), the consulting giant Burry measures Palantir against, deferred revenue of about $7.6 billion amounts to around 40% of quarterly revenue.

Palantir's deferred revenue of about $613 million comes to 32% of its $1.94 billion in second-quarter revenue, effectively the ratio Burry cites. Add the $453 million of customer deposits Palantir groups with it as contract liabilities, and the figure is still only about 55%. On either basis, Palantir collects like Accenture, not like Salesforce.

Of course, the rest of the filing hardly describes a company in trouble. Revenue grew 93% year over year in the second quarter, and operating cash flow more than doubled in the first half, to $2.1 billion.

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Customers are paying. They are just paying later, and in a more concentrated way, than software investors might assume.

And that, I think, is where Burry's argument lands hardest. It isn't an accusation of fraud. Every number he cites is disclosed. It is a reclassification argument: If Palantir earns its revenue the way a consultant does, the stock may not deserve a software valuation.

At about 150 times earnings, shares have a long way to fall if the market ever agrees with him. His sub-$100 billion scenario is more than 75% below today's value. I was on the sidelines at this valuation before Burry wrote a word, and the second-quarter filing doesn't move me off them.

Palantir just posted the kind of revenue growth that makes software investors stop mid-scroll, yet the stock sits 8% below its all-time high with insiders selling and a valuation that has skeptics reaching for antacids. Whether that tension resolves as…

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Palantir (NASDAQ:PLTR | PLTR Price Prediction) is closing in on a market cap of roughly $387 billion, and the trillion-dollar question is whether hyper-growth in U.S. commercial AI can justify the multiple. After a Q2 that CEO Alex Karp called “otherworldly”, our proprietary model still sees room to run.

The 24/7 Wall St. price target for Palantir is $219.66 over the next 12 months, an upside of 30.8% from the current $168.02. Our model signals meaningful upside with high confidence.

24/7 Wall St. Price Target Summary Metric Value Current Price $168.02 24/7 Wall St. Price Target $219.66 Upside 30.8% Directional Bias Constructive Confidence Level 90% A Melt-Up Month Meets a Volatile Session PLTR has been on a tear. Shares are up 46.21% over the past month and 4.16% over the past week, though today’s session opened weak with a 6.62% pullback from the prior close of $179.92. YTD, the stock is only 1.22% higher after a February drawdown, and it sits 8% below its 52-week high of $207.52.

The catalyst has been Q2 FY2026: revenue of $1.94 billion grew 92.83% year over year, EPS of $0.41 beat consensus by 46.43%, and U.S. commercial revenue rocketed 149%. Management raised full-year guidance to $8.150 to $8.158 billion, which they described as their “largest-ever full-year revenue guidance raise.”

Bull Case: $228 and Beyond Bulls have a straightforward thesis. Palantir’s Rule of 40 score hit 155%, net dollar retention reached 157%, and Total Contract Value grew 129% on a duration-weighted basis. Karp told investors he is “driving the business to grow at a rate equal or above to what we have in U.S. commercial for the next 18 months.”

Government exposure adds another leg: the FY2027 Department of War budget requests a historic $58.5 billion for AI investment, and Palantir’s trailing 12-month defense revenue is still less than 25 basis points of the Pentagon’s budget. Our bull-case one-year target is $228.06.

What Could Go Wrong The bear case starts with valuation. PLTR trades at a trailing P/E of 255 and a price-to-free-cash-flow of 197. Insider activity has skewed toward selling, and Polymarket’s near-term composite sentiment reads bearish at 39.55.

Stock-based comp of $265 million in Q2 is real dilution. Bulls will note that SBC funds the elite technical hiring driving the platform, and GAAP operating margin still expanded to 47%. Our bear-case one-year target is $182.48.

How Palantir Compares to ServiceNow and Snowflake ServiceNow (NYSE:NOW) is the closest scaled enterprise AI workflow peer. NOW posted Q2 FY2026 revenue of $3.99 billion, up 24%, with ServiceNow AI crossing $1 billion in ACV. Palantir grew nearly four times faster off a smaller base, which supports our premium target.

Snowflake (NYSE:SNOW) is the data-platform contrast. SNOW’s Q1 FY2027 revenue rose 33.5% to $1.39 billion, but the company remains unprofitable with a negative earnings yield of -1.2%. Palantir’s 62% adjusted operating margin makes the 24/7 Wall St. price target look reasonable relative to this peer set.

Palantir Price Prediction 2026-2030 The 24/7 Wall St. price target of $219.66 rests on one factor above all: Palantir is compounding growth and margin simultaneously at a scale nothing else in software matches.

The constructive case strengthens if U.S. commercial TCV keeps growing above 100%. The setup weakens if the Rule of 40 score slips below 100% or if government AI budgets stall. For now, the fundamentals support the premium multiple.

Year 24/7 Wall St. Price Target 2026 $219.66 2027 $258 2028 $298 2029 $330 2030 $362 These projections assume Palantir executes on its sovereign AI roadmap and defense pipeline. A recession-driven pause in enterprise AI budgets, or accelerated share dilution, could compress this trajectory materially.

Contact [email protected] for any questions or corrections.

A month has gone by since the last earnings report for Palantir Technologies Inc. (PLTR - Free Report) . Shares have added about 10.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Palantir Technologies due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts.

PLTR Beats Q2 Earnings EstimatesPalantir Technologies delivered another exceptional quarter, with second-quarter 2026 results comfortably surpassing Wall Street expectations.

Revenues reached $1.94 billion, increasing 92.8% year over year and 19% sequentially, while beating the Zacks Consensus Estimate of $1.81 billion by 7.2%.

Earnings per share came in at 41 cents, up from 16 cents a year ago, representing 156.3% year-over-year growth, while rising from the previous quarter's 34 cents (20.6% sequential growth). EPS also exceeded the consensus estimate of 35 cents by 17.1%.

Commercial Business Remains PLTR’s Primary Growth EngineCommercial revenue climbed to $945 million, increasing 109.7% year over year and accounting for nearly 49% of total quarterly revenue. Government revenue reached $990 million, rising 79% from the prior-year quarter and representing about 51% of total sales.

The company's U.S. operations remained the biggest contributor to growth. U.S. revenues totaled $1.57 billion, representing more than 81% of company-wide revenue, reflecting exceptionally strong customer demand for enterprise AI deployments.

Large contract activity remained particularly robust. During the quarter, the company closed 220 deals worth at least $1 million, reflecting increasing adoption of its Artificial Intelligence Platform across commercial enterprises and government agencies.

Margins and Cash Flow Highlight PLTR’s Operational StrengthThe company's rapid revenue expansion was accompanied by outstanding profitability. Adjusted gross margin remained exceptionally high at 86%, highlighting the scalability of Palantir's software platform. Adjusted operating margin expanded to 62%, among the highest across enterprise software companies.

Cash generation remained equally impressive. Cash from operations totaled $1.216 billion, while adjusted free cash flow reached approximately $1.22 billion during the quarter. These figures translate into an adjusted free cash flow margin of roughly 63%, illustrating Palantir's ability to convert revenue growth into substantial cash generation.

The company ended the quarter with $9.2 billion in cash, cash equivalents, and short-term U.S. Treasury securities, providing considerable financial flexibility to fund product development and future expansion initiatives.

While management acknowledged that gross margin experienced modest pressure from assuming cloud-hosting responsibilities for a government customer, executives indicated that the move should improve implementation speed and strengthen long-term customer relationships.

Bookings Show Demand Remains Exceptionally StrongBeyond reported revenue, forward-looking indicators also strengthened. Total contract value bookings reached $3.4 billion, reflecting another record quarter for customer commitments.

Net dollar retention stood at 157%, demonstrating that existing customers continue expanding their usage significantly after initial deployments.

Total remaining deal value increased to $13.1 billion, while remaining performance obligations reached $4.9 billion, providing strong visibility into future revenue growth.

These metrics suggest that Palantir's current momentum is not solely driven by recent contract wins but is increasingly supported by long-term customer expansion.

AI Platform Expands PLTR’s Competitive PositionPalantir's product strategy increasingly revolves around enabling enterprises to deploy AI models while maintaining full ownership over their data, workflows and operational knowledge.

Management emphasized that customers increasingly prioritize flexibility, allowing organizations to benchmark different AI models and replace them whenever necessary without becoming dependent on a single provider.

This positioning appears to resonate strongly with enterprises seeking greater control over rapidly evolving AI technologies. Rather than competing directly on foundation models, Palantir continues focusing on the software layer that integrates, manages and operationalizes AI across organizations.

Management also highlighted growing demand from customers that initially adopted Foundry but are now expanding toward broader AI deployments across multiple business functions.

Management Raises Guidance AgainPerhaps the most significant takeaway from the quarter was management's increased confidence in future growth. For the third quarter of 2026, Palantir expects revenues between $2.16 billion and $2.164 billion, implying another sequential increase of roughly 12% from the second quarter. Adjusted income from operations is projected between $1.292 billion and $1.296 billion.

Management also substantially increased full-year guidance. Revenues are now expected between $8.15 billion and $8.158 billion, up from the previous outlook of $7.65$7.662 billion. The midpoint of the guidance therefore increased by nearly $500 million, representing one of the company's largest upward revisions. The company also lifted its U.S. commercial revenue forecast to more than $3.424 billion compared with the earlier expectation exceeding $3.224 billion.

Adjusted operating income guidance increased to $4.889-$4.897 billion, while adjusted free cash flow guidance rose to $4.5-$4.7 billion, reinforcing management's confidence that profitability will continue improving alongside revenue growth.

How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a upward trend in estimates revision.

The consensus estimate has shifted 10.74% due to these changes.

VGM ScoresCurrently, Palantir Technologies has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a score of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Palantir Technologies has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry PlayerPalantir Technologies belongs to the Zacks Internet - Software industry. Another stock from the same industry, Automatic Data Processing (ADP - Free Report) , has gained 4.8% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.

ADP reported revenues of $5.47 billion in the last reported quarter, representing a year-over-year change of +6.8%. EPS of $2.64 for the same period compares with $2.26 a year ago.

For the current quarter, ADP is expected to post earnings of $2.78 per share, indicating a change of +11.7% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

ADP has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.

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Veteran financial services leader to join the company in January 2027

MIAMI--(BUSINESS WIRE)--Palantir Technologies Inc. (NASDAQ: PLTR) today announced that Peter Zaffino will join the company as Global Head of Financial Services, effective January 15, 2027. Mr. Zaffino, previously Chief Executive Officer and Executive Chairman of AIG, will drive growth and transformational impact across Palantir’s financial services business, including insurance companies, banks, asset managers, private equity firms, and other financial institutions.

Mr. Zaffino brings more than 30 years of proven leadership across global financial services and insurance. He has served as chief executive across three different organizations and has built a reputation as one of the industry’s most formidable operators and transformation executives.

“Peter has spent his career challenging inertia and rejecting incrementalism within large enterprises. We partnered to deploy our products to create actual alpha within one of the most interesting and complex institutions in the world. We are fortunate that he is joining us,” said Alex Karp, Co-Founder and Chief Executive Officer of Palantir Technologies.

“I have long admired the work of Alex and the Palantir team. The value they deliver across industries has resulted in impressive growth for Palantir and actionable insights for customers,” said Mr. Zaffino. “The organizations that will lead in the future are those that are building durable AI infrastructure today. I am incredibly excited to work with financial services organizations to transform their AI strategy into strategic advantage.”

Palantir has worked alongside financial institutions for nearly two decades, transforming how organizations across banking, insurance, and capital markets operate and placing powerful decision-making capabilities directly in the hands of operators.

About Palantir Technologies Inc.

Foundational software of tomorrow. Delivered today. Additional information is available at https://www.palantir.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may relate to, but are not limited to, Palantir’s expectations regarding the amount and the terms of the contract and the expected benefits of our software platforms. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Forward-looking statements are based on information available at the time those statements are made and were based on current expectations as well as the beliefs and assumptions of management as of that time with respect to future events. These statements are subject to risks and uncertainties, many of which involve factors or circumstances that are beyond our control. These risks and uncertainties include our ability to meet the unique needs of our customer; the failure of our platforms to satisfy our customer or perform as desired; the frequency or severity of any software and implementation errors; our platforms’ reliability; and our customer’s ability to modify or terminate the contract. Additional information regarding these and other risks and uncertainties is included in the filings we make with the Securities and Exchange Commission from time to time. Except as required by law, we do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise.

More News From Palantir Technologies Inc.

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Palantir Technologies Inc. (PLTR, Financials), the artificial intelligence and data analytics company, still has support from Baird even after its valuation climbed to roughly $448 billion.

The firm, after a small group of investors saw a technical presentation, repeated its Outperform rating and $200 price target.

Baird's optimism about Palantir's future rests on its ontology, agentic AI capabilities and its rising role in sovereign AI. The obvious tension is the valuation.

Palantir shares were selling at about $186, giving the business a market valuation of about $448 billion. That means investors are already paying a steep price for development down the road. But the growth is still unusually strong.

Revenue growth picked up to 93% and the company's 2026 revenue growth outlook is currently at 82%. Gross margin is roughly 85%.

Other analysts have also raised their objectives. UBS boosted its objective to $220 while Phillip Securities raised its aim to $215.

Palantir's contract with the Pentagon for the Maven Smart System is likewise on track to generate an annual revenue run-rate of about $1 billion.

The next question is whether Palantir can keep growing fast enough to warrant one of the wealthiest values in software.

SHENZHEN, CHINA - JULY 27: In this photo illustration, a smartphone displays the logo of Palantir Technologies Inc. (NASDAQ: PLTR), an American software company specializing in artificial intelligence platforms and data analytics solutions, in front of a screen showing the company's latest stock market chart on July 27, 2026 in Shenzhen, Guangdong Province, China. (Photo illustration by Cheng Xin/Getty Images)

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This article was written by Doug Nathman, with research by his team at Trefis.

Palantir Technologies (PLTR) stock gained 34% during the three months ending in late August, versus 2.1% for the S&P 500. The August 3 second-quarter report received the credit. Yet almost everything it verified had already been signed, filed, or stated publicly by early May. The advance was visible beforehand.

Stellantis, The USDA And Cleveland-Cliffs Signed FirstIn late March, the company extended and expanded its Stellantis partnership for another five years, widening Stellantis’s use of Palantir Foundry and incorporating Palantir’s AI platform. In April, the USDA granted a contract worth up to $300 million to protect farmland and update services for farmers, while Cleveland-Cliffs entered into a three-year agreement placing Palantir’s AI at the core of its operations and commercial processes. Trailing-twelve-month revenue as of fiscal Q1 2026 stood at $5.22 billion, meaning none of these developments alone was transformative; what mattered was that all three had been agreed upon before the price moved.

The Expansion Rate Rose Through Three QuartersContracts are uneven. The clearer signal was net dollar retention, which measures what current customers spend versus a year earlier, excluding customers acquired during the previous twelve months. Retention was 134% in fiscal Q3 2025 and 139% in fiscal Q4 2025, before rising 1,100 basis points to 150% in fiscal Q1 2026, the biggest increase in that stretch and already on record by early May. That rise is not an AI forecast; it reflects existing customers are paying more. The growth was profitable as well: trailing operating margin as of fiscal Q1 2026 was 38.1%, compared with a three-year average of 14.2%.

AI Sovereignty Was A Fresh Name For Existing MomentumThe thesis also came before August. In early May, the company’s revenue chief described the opportunity as enterprises recognizing the danger of relying solely on models. On August 3, it received a name and a number: U.S. commercial revenue increased 149% year over year to $764 million in fiscal Q2 2026, and full-year 2026 revenue guidance was raised to a midpoint of $8.154 billion, representing 82% growth year over year and an 11-point increase over the prior guide’s growth rate. Management describes this demand as AI sovereignty, referring to customers seeking to keep their data, logic, and security under their own control rather than an outside lab’s. Demand continued to come in after fiscal Q2 2026 ended: the Sovereignty Bootcamps have attracted nearly 200 organizations, with a second announced on August 19.

Clear In Direction, Not In MagnitudeThe direction was therefore apparent. Its magnitude was not, and almost no one was prepared: implied volatility eased from the 67th percentile of its trailing one-year range in mid-April to the 15th percentile by mid-May, indicating that options traders were positioned for a smaller move in either direction just as the advance started. Two factors qualify the result. Microsoft gained 20.5% during the same period, while Alphabet declined 12.0% and Amazon declined 4.3%, meaning some of the move followed buying in the biggest software names rather than the sector.

Even after the advance, the stock remains about 14% below its $207.18 fifty-two-week high.

Key Takeaways Palantir's Rule of 40 surged from 64% in Q2 2024 to 155% in Q2 2026 as growth and margins improved.Revenue growth accelerated to 93%, while adjusted operating margin expanded to 62% over the same period.PLTR gained 51% in the past month compared with the industry's 8% rise, while 2026 earnings estimates climbed. Palantir Technologies (PLTR - Free Report) continues to stand out in the software industry, with its rapidly improving Rule of 40 emerging as one of the clearest indicators of the company's execution strength.

The Rule of 40, which combines revenue growth with operating margin, is widely recognized as a benchmark for evaluating the health and quality of software businesses. While surpassing the 40% threshold typically signals a well-balanced company, Palantir has moved far beyond that benchmark.

The company's Rule of 40 climbed from 64% in the second quarter of 2024 to an impressive 155% by the second quarter of 2026. The improvement has been consistent throughout the period, driven by accelerating top-line growth alongside steadily expanding profitability.

Over the same period, revenue growth increased from 27% to 93%, reflecting rising demand for Palantir's AI-powered platforms across commercial enterprises and government organizations. At the same time, adjusted operating margins improved from 37% to 62%, demonstrating that the company is scaling its operations efficiently while continuing to expand profits.

This combination of rapid growth and improving margins remains rare within the software industry. Many AI-focused companies have delivered impressive revenue expansion but have struggled to maintain profitability amid elevated infrastructure and development spending. Palantir, by contrast, continues to improve both metrics simultaneously.

The sustained improvement in the Rule of 40 also supports the view that Palantir is evolving from a data analytics provider into a core AI infrastructure company. If the company maintains its current trajectory, PLTR could increasingly be recognized as one of the highest-quality growth stocks in the enterprise software sector.

Peer ViewTwo closely watched peers are Snowflake (SNOW - Free Report) and MongoDB (MDB - Free Report) . Snowflake continues expanding its AI data cloud ecosystem and remains a major player in helping enterprises manage large-scale AI-ready datasets. As enterprise AI adoption accelerates, Snowflake could benefit from the rising demand for cloud-native data infrastructure.

Meanwhile, MongoDB is strengthening its role in AI-era application development. MDB enables enterprises to build scalable, flexible applications capable of handling increasingly complex AI workloads. MongoDB also remains well-positioned as organizations modernize their software architecture to support operational AI deployments.

PLTR’s Price Performance & EstimatesThe stock has gained a massive 51.2% over the past month compared with the industry’s 8% rise.

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From a valuation standpoint, PLTR trades at a forward price-to-sales ratio of 42.97X, well above the industry’s 3.97X. It carries a Value Score of F.

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The Zacks Consensus Estimate for PLTR’s 2026 earnings has increased over the past 30 days.

PLTR stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Buckland Partners Management Co LLC acquired a new position in Palantir Technologies Inc. (NASDAQ:PLTR – Free Report) in the 2nd quarter, according to its most recent 13F filing with the Securities & Exchange Commission. The firm acquired 10,700 shares of the company’s stock, valued at approximately $1,248,000.

Other institutional investors and hedge funds also recently added to or reduced their stakes in the company. PFA Pension Forsikringsaktieselskab acquired a new position in Palantir Technologies during the fourth quarter worth $222,143,000. Vanguard Group Inc. boosted its position in shares of Palantir Technologies by 0.7% during the 4th quarter. Vanguard Group Inc. now owns 215,444,098 shares of the company’s stock valued at $38,295,188,000 after acquiring an additional 1,557,828 shares during the last quarter. Global Retirement Partners LLC boosted its holdings in Palantir Technologies by 6.8% in the 4th quarter. Global Retirement Partners LLC now owns 79,282 shares of the company’s stock valued at $14,092,000 after purchasing an additional 5,070 shares during the last quarter. Income Insurance Ltd purchased a new position in Palantir Technologies in the fourth quarter worth approximately $1,228,000. Finally, Sun Financial Inc purchased a new stake in Palantir Technologies in the fourth quarter valued at $1,282,000. 45.65% of the stock is currently owned by institutional investors and hedge funds.

Analyst Ratings Changes PLTR has been the subject of a number of research analyst reports. President Capital upgraded Palantir Technologies from a “neutral” rating to a “buy” rating and increased their price target for the stock from $25.50 to $133.00 in a report on Monday, June 29th. Mizuho upped their target price on shares of Palantir Technologies from $185.00 to $215.00 and gave the company an “outperform” rating in a research report on Tuesday, August 4th. DA Davidson increased their target price on shares of Palantir Technologies from $175.00 to $200.00 and gave the stock a “buy” rating in a research note on Tuesday, August 4th. Northland Securities set a $200.00 price target on shares of Palantir Technologies in a research report on Tuesday, August 4th. Finally, Oppenheimer downgraded shares of Palantir Technologies from an “outperform” rating to a “market perform” rating in a research note on Tuesday, August 4th. Two research analysts have rated the stock with a Strong Buy rating, twenty have given a Buy rating, eleven have issued a Hold rating and three have assigned a Sell rating to the company. According to data from MarketBeat.com, Palantir Technologies presently has an average rating of “Moderate Buy” and an average price target of $192.19.

Get Our Latest Stock Report on Palantir Technologies Palantir Technologies News Summary Here are the key news stories impacting Palantir Technologies this week:

Positive Sentiment: Palantir benefited from a broad risk-on session in which major stock indexes recovered from the prior sell-off and Bitcoin rallied, helping lift sentiment toward growth and AI equities. Stock Market Today: Dow Gains 550 Points; Palantir Rises, Bitcoin Rallies Positive Sentiment: Investor follow-through from Palantir’s latest quarterly report remains a major catalyst. Revenue rose 92.8% year over year to approximately $1.94 billion, U.S. commercial revenue surged 149%, and management raised its full-year 2026 revenue, operating-income and free-cash-flow outlooks. Record contract value also points to continued demand for the company’s AI software across commercial and defense customers. Palantir Rises as Strong AI Demand and Raised Outlook Keep Momentum Going Positive Sentiment: Palantir moved above a closely watched technical level and cleared a reported buy zone, potentially attracting momentum-oriented investors and creating an add-on entry for existing shareholders. Palantir Stock Clears Buy Zone But Could Offer Alternative Entry Neutral Sentiment: The options market implies less movement than Palantir has historically delivered, but its projected trading range remains wide. That signals elevated event and volatility risk rather than a clear directional catalyst. Even The Calm Reading On Palantir Puts Nearly Half The Position In Play Negative Sentiment: Valuation remains a significant concern after the recent rally. With a very high earnings multiple, investors may demand continued exceptional growth for further gains. Negative Sentiment: Michael Burry’s renewed bearish options position and warning that the AI data-center boom may contain leverage and circular-financing risks could pressure sentiment, particularly if enthusiasm for AI stocks fades. Palantir: Why Michael Burry’s Put Buys Should Not Deter Retail Investors Negative Sentiment: Reported insider activity shows substantial selling and no open-market purchases by insiders over the past six months, a potential caution signal for investors despite strong business momentum. Insider Activity In other Palantir Technologies news, Director Lauren Elaina Friedman Stat sold 3,032 shares of the business’s stock in a transaction on Wednesday, August 5th. The shares were sold at an average price of $165.00, for a total value of $500,280.00. Following the transaction, the director directly owned 54,107 shares of the company’s stock, valued at approximately $8,927,655. The trade was a 5.31% decrease in their position. The sale was disclosed in a filing with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Jeffrey Buckley sold 1,481 shares of the stock in a transaction dated Thursday, June 11th. The stock was sold at an average price of $128.80, for a total transaction of $190,752.80. Following the transaction, the insider directly owned 60,226 shares of the company’s stock, valued at $7,757,108.80. This represents a 2.40% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders have sold 227,778 shares of company stock valued at $30,696,263. Company insiders own 9.53% of the company’s stock.

Palantir Technologies Stock Up 3.4% Shares of Palantir Technologies stock opened at $179.94 on Friday. The company has a 50 day moving average of $138.90 and a 200 day moving average of $140.74. The company has a market capitalization of $432.41 billion, a P/E ratio of 153.79, a P/E/G ratio of 2.54 and a beta of 1.59. Palantir Technologies Inc. has a 52-week low of $106.37 and a 52-week high of $207.52.

Palantir Technologies (NASDAQ:PLTR – Get Free Report) last posted its earnings results on Monday, August 3rd. The company reported $0.41 earnings per share for the quarter, topping the consensus estimate of $0.34 by $0.07. Palantir Technologies had a return on equity of 30.57% and a net margin of 49.01%.The firm had revenue of $1.94 billion during the quarter, compared to analysts’ expectations of $1.81 billion. During the same quarter in the previous year, the business earned $0.16 earnings per share. The firm’s revenue was up 92.8% compared to the same quarter last year. As a group, research analysts anticipate that Palantir Technologies Inc. will post 1.27 earnings per share for the current fiscal year.

(Free Report)

Palantir Technologies is a software company that develops data integration, analytics and operational decision-making platforms for government and commercial customers. Founded in 2003 by a team that included Alex Karp and Peter Thiel, Palantir has grown into a provider of enterprise-scale software designed to help organizations integrate disparate data sources, build analytic models and drive operational workflows. The company went public in 2020 and continues to position its products around large, complex data projects where security, provenance and real-time collaboration are important.

Palantir’s product portfolio centers on a small number of core platforms.

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Palantir Technologies (PLTR -0.70%) rebounded nicely after posting strong earnings. Its 33% gain over the past month puts it just into the green compared to a year ago. Although the artificial intelligence (AI) company is growing at a tremendous rate, valuations remain a core question in the bullish thesis.

Here's what investors should consider before entering the growth stock at current levels.

Image source: Getty Images.

AI sovereignty demand is heating up Nations do not want to rely on other nations for their AI tools. They want full control over their resources, and Palantir is at the center of this objective. Palantir CEO and co-founder Alex Karp told investors that AI sovereignty demand "has now been unleashed" and has made the company feel "very optimistic about the future."

Grand View Research projects a 20.5% CAGR for the sovereign AI market through 2033. However, the company outpaces that growth rate by a wide margin. For instance, the U.S. government is Palantir's largest customer. Palantir earned $809 million from the government in Q2, which was a 90% year-over-year improvement. It also represented 18% sequential growth and came to more than 40% of total revenue.

As the U.S. government invests more heavily in AI, sovereign intelligence will become more valuable. Other countries are following suit, with Palantir as the highly touted option for this technology. Since the government accounts for a large portion of Palantir's total business, continued investments in sovereign AI provide a meaningful tailwind for Palantir's long-term fundamentals.

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The commercial segment is growing even faster than government revenue Although the U.S. government is still Palantir's largest customer, its commercial segment is growing much faster. U.S. commercial revenue surged by 149% year over year and made up $764 million of total sales. The gap between U.S. commercial and government revenue is narrowing as more businesses embrace AI.

A 28% sequential growth rate indicates that momentum is continuing and translating into higher profits. Palantir's net income more than tripled year over year to reach $1.1 billion, resulting in a net profit margin above 50%. Guidance implies that revenue growth will continue. The midpoint of guidance is set at $2.162 billion, representing a 12% quarter-over-quarter increase.

That's just realized revenue. Palantir has been closing record deals left and right that offer multiyear revenue visibility. For instance, the company closed a record-setting $2.13 billion of U.S. commercial deals. Not all of that revenue was realized this quarter, but it will show up in future quarters.

Although Palantir trades at a high valuation, its status as a linchpin in AI for governments and enterprises can help it maintain current levels. The company is growing rapidly, and if you can keep a five- to 10-year horizon, it looks like a good deal.

Key Takeaways Palantir posted a roughly 47% GAAP EBIT margin, with adjusted EBIT margin near 62%.Its Rule of 40 score jumped to 155% from 94% a year earlier as growth and profitability accelerated.Palantir helps enterprises deploy AI securely across critical operations, linking data and workflows. Palantir Technologies’ (PLTR - Free Report) expanding margins provide one of the strongest arguments against the bearish view that its rapid growth is destined to fade sharply. The company generated $912 million in GAAP EBIT in its latest quarter, translating into an impressive EBIT margin of roughly 47%. On an adjusted basis, the margin climbed to approximately 62%, while adjusted free-cash-flow margin reached 63%.

These numbers become even more compelling when viewed alongside Palantir’s growth trajectory. Its Rule of 40 score surged to 155% compared with 94% a year earlier. That combination of accelerating revenue and expanding profitability suggests that the company is not merely growing faster; it is becoming economically more efficient as it scales.

The key factor behind this durability is Palantir’s positioning. Rather than competing directly with large language model providers, Palantir helps organizations deploy AI securely across critical operations. As AI models become increasingly interchangeable, enterprises may place greater value on platforms capable of connecting proprietary information, workflows and decision-making processes without compromising security.

Peers to WatchSnowflake (SNOW - Free Report) offers a useful comparison because Snowflake is also benefiting from enterprises seeking to extract greater value from their data and AI investments. However, Snowflake’s role is centered more heavily on cloud data infrastructure, whereas Palantir integrates AI into operational decision-making. Snowflake therefore provides an important benchmark for evaluating enterprise AI adoption, while Snowflake highlights how rapidly demand for intelligent data platforms can evolve.

C3.ai (AI - Free Report) is another relevant peer, as its business is focused directly on enterprise AI applications. Yet C3.ai operates with a different scale and profitability profile. C3.ai illustrates why Palantir’s combination of growth, margins and cash generation deserves particular attention.

PLTR’s Price Performance, Valuation & EstimatesThe stock has gained 32% in the past month compared with the industry’s 2% rise.

                                                             Image Source: Zacks Investment Research

From a valuation standpoint, PLTR trades at a forward price-to-sales ratio of 40.79X, well above the industry average of 3.89X. It carries a Value Score of F.

                                                                Image Source: Zacks Investment Research

The Zacks Consensus Estimate for PLTR’s 2026 earnings increased over the past 60 days.

PLTR currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Palantir Technologies (PLTR -0.58%) has already made the leap from controversial government contractor to one of the world's most valuable artificial intelligence companies.

Now investors are asking whether it can make another, much bigger leap. Could Palantir become the next trillion-dollar stock?

It's a question worth asking after the company's extraordinary second-quarter results. Revenue surged 93% year over year to $1.94 billion, and management raised its 2026 revenue outlook to roughly $8.15 billion, implying growth of about 82%.

Those numbers help explain why investors are even discussing a trillion-dollar valuation.

But there's a catch. Palantir is already worth roughly $400 billion. So the question isn't simply whether the company can become enormous. It's whether it can become enormous enough, fast enough, to justify today's stock price.

Image source: Getty Images.

The starting point is extraordinary Palantir's second-quarter results were difficult to ignore.

Revenue jumped 93% year over year to $1.94 billion, while U.S. commercial revenue soared 149% to $764 million. And this wasn't just revenue growth. Palantir reported a 62% adjusted operating margin in the quarter and generated more than $1 billion of GAAP net income. It also closed 220 deals worth at least $1 million, including 98 deals worth at least $5 million.

That's an unusual combination. Most companies growing this quickly are sacrificing profitability to fund expansion. Palantir is doing the opposite. It's growing rapidly while becoming more profitable.

That's exactly the type of business that can support an enormous valuation.

The commercial business could be the key to the trillion-dollar valuation For years, investors viewed the company primarily through the lens of its government business. That's changing.

U.S. commercial revenue is scaling rapidly, ending the quarter only about $45 million behind U.S. government revenue. If commercial customers continue adopting Palantir's software at scale, the addressable market becomes enormous.

And commercial software has another advantage: once a platform becomes deeply embedded in an organization, customers can expand their usage over time. In other words, Palantir can count on adding new customers and growing customer wallet share over time to sustain its revenue growth.

But $1 trillion requires much more than just great growth Here's where investors need to do some simple math.

Palantir's market value is roughly $400 billion today.  Reaching $1 trillion would therefore require the company to increase its value by roughly 2.5 times. That sounds manageable after watching the stock's extraordinary run of more than 600% in the last five years.

But here's the thing. While most investors focus on growth rate, valuation matters too.

Palantir expects to generate about $8.15 billion of revenue in 2026. A $1 trillion valuation against that revenue would represent more than 120 times trailing sales at the end of the year. That's up from a current ratio of 67 times trailing sales as of Aug. 17.

Obviously, investors won't be valuing Palantir against 2026 revenue forever. That's the entire point of investing in a growth company. But the real question is what revenue Palantir can produce several years from now.

If the market eventually values Palantir at 30 times sales, the company would need roughly $33 billion of annual revenue to support a $1 trillion valuation. At 20 times sales, it would need about $50 billion. The growth rates still have to support lofty price-to-sales ratios in the long run. For what it's worth, the highest P/S ratio among the "Magnificent Seven" stocks is 21.5x for Nvidia.  

Suddenly, the challenge becomes clearer. Palantir doesn't merely need to remain a great company. It needs to become much larger while remaining great.

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Another problem with the trillion-dollar thesis Palantir's valuation already assumes a lot of success. That means the company has less room for disappointment than a typical growth stock.

And there is another issue investors shouldn't ignore: international expansion.

Palantir's U.S. business is exploding, but international growth has been much slower. A quick back-of-the-envelope calculation shows that overseas revenue grew by less than 40%.

That's not necessarily a problem today. The U.S. market alone may provide years of growth. But a company approaching $1 trillion probably needs a compelling global opportunity as well.

If Palantir struggles to reproduce its U.S. success overseas, the long-term ceiling could be lower than the bulls expect.

So, can Palantir reach $1 trillion? I think there's a path for the company to reach that target, but I wouldn't call it the base case yet.

It needs several more years of unusually strong growth, followed by a gradual transition toward a much larger and highly profitable software business.

If Palantir can grow from roughly $8 billion of revenue today toward $30 billion-plus over the next several years, while maintaining exceptional margins and earning a premium valuation, the $1 trillion milestone becomes mathematically achievable.

But there's a big difference between possible and probable. At today's valuation, investors are already paying heavily for that future.

The Q2 earnings season continues to wind down, which has overall shown immense strength with outsized growth. There have been several standout releases during the Q2 earnings cycle, including those from Palantir (PLTR - Free Report) and Microsoft (MSFT - Free Report) .

Palantir Earnings

Palantir’s overall revenue surged by 93% YoY to $1.94 billion, yet again reflecting another acceleration relative to recent periods. Huge top-line growth has been led by rock-solid demand, with Palantir closing $3.4 billion of total contract value throughout the period, jumping 49% YoY.

U.S. results came in notably strong, with U.S. commercial and government revenue climbing by 149% and 90%, respectively. Higher-value deals are also continuing to flow in at a rapid pace, with PLTR closing 73 deals worth at least $10 million throughout the period.

The company lifted its guidance across many metrics, now expecting FY26 revenue in a band of $8.150 - $8.158 billion, reflective of 82% YoY growth. U.S. commercial demand is also expected to remain red-hot, with PLTR upping the guidance to reflect 134% YoY growth.

Microsoft Earnings

Microsoft posted a double-beat relative to our consensus expectations, with sales growing by 18% YoY alongside 23% YoY growth in earnings. Most importantly, the mega-cap heavyweight delivered favorable Intelligent Cloud results, a key benchmark the market has consistently scrutinized amid the billions it’s been investing in AI infrastructure.

Microsoft’s Intelligent Cloud results include Azure, its cloud computing platform that provides AI computing power to businesses. Intelligent Cloud revenue came in at $39.3 billion, beating our consensus estimate handily and growing 32% YoY. The growth rate here is mightily important from a sentiment standpoint, showing an acceleration relative to recent periods.

In this episode of Motley Fool Hidden Gems Investing, Motley Fool contributors Tyler Crowe, Travis Hoium, and Lou Whiteman discuss:

Palantir's earnings and guidance.The case for model-agnostic AI.Caterpillar's incredible quarter.Is Spotify a growth stock or a value stock?To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy.

A full transcript is below.

This podcast was recorded on Aug. 4, 2026.

Tyler Crowe: Palantir takes shots at OpenAI and Anthropic today on Motley Fool Hidden Gems Investing. Welcome to Motley Fool Hidden Gems Investing. I'm your host, Tyler Crowe. Today, I'm joined by longtime Fools Lou Whiteman, Travis Hoium, doing a little bit of mixing it up everyone's getting those last-minute summer vacations in before the kids got to go back to school. We'll probably see a lot of host shuffling and guest shuffling over the next couple of weeks.

We are deep in earnings season, and we had three really big earnings reports today, a lot of contrasting things going on in the market. We want to start today with Palantir because, as we're recording, shares are up 26%. The company reported earnings after the close yesterday that beat expectations handily. They increased guidance. Everything looked pretty good. Now, there's been a lot of beat expect earnings so far this season, guys, but I have yet to see one that's really resulted in the market celebrating like we have seen with this one. What exactly was it about Palantir's earnings?

Lou Whiteman: They just blew it out of the park. They just had fantastic results. This is a company with a lot of hubris, and sometimes the hubris is justified. Ninety-three percent year over year, top-line growth. If you want to look trailing 12 months, 79% growth, so this isn't an anomaly, 51% cash flow margins. That's fantastic. The question forever here has been, there's no way you can justify the valuation here if it's a defense contractor. For all our jokes about the Pentagon budget, the Pentagon just doesn't spend money at the rate needed to justify Palantir's valuation. Commercial had been the laggard, but commercial was up 150%. This is exactly what you want.

Travis, I'm curious, what do you think? I can squint and maybe see remaining performance obligations were flat? So maybe that might be a dent, but even then, commercial is different than government, so that could be an adjustment, but I don't know. Tell me what's wrong here? This is just fantastic.

Travis Hoium: It's hard to quibble with any of the numbers. It is always hard for me to wrap my head around a company that's trading for 60 times sales because it's been over 100 times sales in the past year, so that typically does not end well for investors. But if you compound your revenue at 100% year over year for multiple years, it takes that multiple down pretty quickly. That's part of what we're seeing is just they are executing on exactly what the market has been pricing in for quite a while. As the shares have pulled back over the past few months, maybe we are going to see a little bit of a slowdown, and then they went, You know what? No, we're going to accelerate that revenue growth. Hard to quibble with anything.

Lou said the biggest number that jumped out to me: its 150% jump in U.S. commercial revenue. Customers aren't growing that quickly, so that means that the customers they do have are spending more. That's impressive because it shows that they're not just testing it out and going, Nah, we're not seeing any value here. They're actually saying, You know what? We want more from you guys.

Tyler Crowe: I think it's fair to say that CEO Palantir Alex Karp is a bit of an acquired taste for investors. Some people absolutely love him, some people might find him a bit off-putting with bombastic language, sometimes a little bit more aggressive and combative than a lot of other CEOs that you see in the market. You see it in his shareholder letters. You see it on the conference call, and he did use that aggressive language a little bit when talking about the large language model developers like OpenAI and Anthropic.

But I think he did get at a core point that he was talking about, and something that I think companies are really going to be thinking about, and it could really determine a lot of what happens in this AI race lately. It's the building model agnostic AI tools, similar to what Palantir does, versus these models that OpenAI and Anthropic are doing that end up in some sense, building competing tools from their own customers after they've built a lot of their own data.

One of the questions I have is does he have a point, and does that really bode well for the future of Palantir where they can make this argument that says, Hey, do you not want OpenAI and Anthropic taking your data and building your own competitor while you feed them their data? Come to us. Is that a valid sales argument or is that just being defensive?

Travis Hoium: It's all of the above. It's their sales argument. He's talking his book, he's talking their business model, and he's trying to sell to customers and you see similar things from Satya Nadella at Microsoft. But the way that he's talking about this, I just want to quote from the shareholder letter. "The models have grown and thrived by essentially ingesting the entire written work product of our civilization and those models, as well as their creators now have their site set on global industry. We have been the beneficiary of the revolt that is underway against submission of this way of working." That is basically declaring war against Anthropic and OpenAI. That is what Karp is doing here, and it's fascinating to see these business models play out because everybody is trying to win this AI game. That's what we've got to watch. Who is actually going to get the customers, who's going to get the revenue, who's going to generate free cash flow? Palantir is making their case, and they're making a pretty good one.

Lou Whiteman: You can always tell the CEOs who are classics majors, can't you? Stuff like that. Look, one read on this is he's worried that those models can do what Palantir can do, and this is actually a sign of weakness. I don't know if that's the case. I think you can make the case either way that the frontier models strengthen Palantir, or they are a threat. The thing that strikes me, though, is we know Palantir valuation. We know what Anthropic hopes to get and what OpenAI. Can they all exist together? Is there a zero-sum game here or a less-than-whole game? I feel like at some point, something has to flinch, and Palantir does have the advantage, I guess, with their installed base.

Tyler Crowe: And to that point, too, Travis, you were talking Satya Nadella, talking about competing models and a lot of this. One of the things that he had mentioned in previous discussions, conference calls, whatever, is basically custom tailoring the type of model that you need and custom fit to what the actual particular task is. Where we're using these generic, most powerful models in the world that cost a ton of money to, I don't know, organize your calendar, isn't exactly like the best use of resources and stuff like that. It'll be interesting to see the resource allocation, and I think that might be where they all make sense because they can fit a certain resource allocation for a business. Maybe we're less expensive, but we don't take on the biggest tasks sort of thing. That's how this works in a world where everyone works in some way or another versus having only one winner in this open eye race. But speaking about OpenAI, we’re going to talk about one of the pick-and-shovel companies that’s doing spectacularly well. That's Caterpillar, after break.

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Tyler Crowe: Moving on to other companies that are reporting earnings recently and doing incredibly well, it was Caterpillar. Earlier today, Caterpillar posted expectation-smashing results this past quarter, and the stock is up about 5.6 on the news as a result. It was up almost 10% in early morning trading. There was a lot to like here. I was looking through it, earnings across all of its segments were up. It looks like everything's doing incredibly well. Was that all the driving force? What were some of the things I might have missed when I did my first class, guys?

Travis Hoium: I think the big thing here is that when you're spending $1 trillion on building out data centers, there's a lot of demand to go around. I don't know if Caterpillar is the second derivative of the AI trade or the third derivative, but it is definitely downstream of all that spending that's going on because that infrastructure is a lot of physical stuff being built, and that's what Caterpillar does. The big thing that it was construction equipment that was up 35% from a year ago, but power energy and resources also did well. The crazy thing is you can think about this all as one big trait because these are all related things. The fact that energy is doing so well is because AI is doing so well. I don't know what to take from this lob besides the fact that just all this is like a huge rising tide that's lifting all of Caterpillar's boats.

Lou Whiteman: I think that's it, let's talk about why because obviously you don't buy a new dirt mover for each data center. You don't like, for every one of these things, we're going to buy all new equipment. But it's a lot like what John Deere with the farmers. We tend to see spending go up when it's a good year on the farm because the farmers are flush with cash, it's when they can. Similarly, with all of this demand, all these orders, this is causing the customers of Caterpillar to feel confident enough to place orders, to invest in their business. I think that's why you see the strength in construction. It wasn't just in the power systems. It wasn't just one thing. This is just the net impact of all of this cash, all of this investment going into the sector that they serve. showing itself in confidence to order heavy equipment. They boosted their full-year guidance, and they had a record equipment backlog. The backlog is a CAT, always something to watch because, again, you get a lot of orders when things are good, and then you see how long it lasts. But assuming that we don't stop building data centers, this is, again, just filling the industry they serve with cash, and you are going to see companies invest in their businesses when they can.

Tyler Crowe: So something it seems like we're kind of dancing around here, and we all know it is that Caterpillar is a cyclical business. Mining is doing really well. Orders go up. But all the end markets are very cyclical, power, construction, all of these things. My question is, obviously, AI is a big part of that cycle. Also there's some other aspects as well. We were talking before the show the idea of deglobalization and critical mineral mining, where it's being more localized and not dominated on a global scale, where you might see a lot not typically redundant wouldn't normally happen in a globalized world, but you're going to have a little bit more like redundant supply of construction materials because everyone wants to mine their own stuff and stuff like that. I don't know how big that is, but it's certainly something to be playing the part here.

My question is, we know it's cyclical, but could this just be an elongated cycle? Because it seems like normally with Caterpillar, one segment's doing relatively well, where its other end markets are weaker, but right now we're in a point where all three segments are posting great results.

Lou Whiteman: Look, this is why investing is hard. We can see something that looks obvious, but good luck getting the timing right. Should we do a shout-out or maybe someone check in on Michael Burry this morning? Because I agree with everything he's been saying about how it's all overvalued. But two of his biggest shorts were Palantir and Caterpillar. The timing is everything. Caterpillar right now feels like a microcosm for the entire market. It's cyclical. It's up 100% in a year. All of the signs are saying yeah, and it keeps working anyway. It will until it won't, and that's what makes investing hard.

Travis Hoium: The word that comes to mind is super cycle, and this is just part of that super cycle. All of that money that's flowing from those giant Silicon Valley companies is flowing to companies like Caterpillar. The question is, when does it stop? Or when does it even slow down? That's something that I've been thinking a lot about is, as long as capex is growing for these data centers, as long as there's more demand for power, more demand for minerals, all of these things are going to do extremely well. But what happens when growth flatlines or heaven forbid falls? That's when paying 38 times earnings for a company like Caterpillar is going to be really rough for investors. But we're not seeing it yet.

Tyler Crowe: It's not the most recent example, but certainly I think we can all remember, like the 2010, China's economic development growth boom, seven pot eight 9% annually was sending companies, mining companies, Caterpillar, companies like this to soaring heights because of demand was just voracious. But the minute we started to see a slowing Chinese economy and the slowing of the construction cycle, I would assume, like, yeah, 15, 16 years ago was the last, like, real super cycle with a lot of this stuff. It'll be interesting to see if this deglobalization in AI trade becomes the next big supercycle for these particular markets. Coming up after the break, one company that didn't do quite as good on the earnings perspective that's Spotify.

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Tyler Crowe: The three companies that we're talking about here today, Spotify's earnings were definitely one of these things is not like the other results. The company reported earnings after the close yesterday, and as we're right now, shares are relatively flat, but they were down quite a bit in early morning trading. The market seems to be doing it a little bit of a favor here. Now, Spotify hit some significant user milestones, total daily average users and things like that were way up, and margin expansion was exceptionally good, but it did miss expectations for revenue and earnings per share. Travis, I know you followed this company pretty intimately. Was this just some quarterly blip, or is this a trend in decelerating revenue and earnings?

Travis Hoium: This is what happens when a company goes from growth mode to we're now a mature company. The expectations are different, and the question is going to be, what do investors expect from the company? And then what are the investors that are going to be excited about that? Spotify grew their total monthly users by 12% year over year. This is a company that has 777 million monthly active users. That is a massive number. They're also continue to grow their premium revenue, 15%, but this is not going to be a company that's going to grow 20-plus percent year over year, like it maybe was a handful of years ago. You're going to be more focused on things like margins and free cash flow. That's not necessarily as exciting.

That said, management thinks that they can continue to grow their compound annual growth rate in that mid-teens range and get to a 20% operating margin. That's a pretty darn good business, the question is, what are you going to pay for it, and that seems to be the battle for investors today is a little bit like Caterpillar. If this is going to be just a mature cash-generating business, what do you pay for it? Is 31 times earnings the right number? Maybe it is, but you're going to have to decide what do you expect as an investor? Are you growth investor or a value investor?

Lou Whiteman: I'm always amazed when they find more people that don't have the service that they can add that way. Good on them for that. But Travis, I think you have it exactly right, is that sometimes with stocks, the stock isn't the problem. The investor base is that this is a fine company, but it is more mature than it used to. It's unlikely to be the growth story it was. It may take time for the investor base to just switch out, and that's going to cause volatility. I think it is a free cash flow store, and I think it has a great story to tell. I think it's a really attractive income/growth hybrid investment from here, but it is going to be a different story than it was. I don't think you're going to see the growth-focused crowd saying “Wow” to these results. That doesn't mean it was a bad quarter, though.

Tyler Crowe: This sounds similar to the conversation we've been having here on some Motley Fool Live events around, like Netflix, as well as, who is the investor anymore? Because these growth stories that all of a sudden are transitioning to, we're still growing just not at these nosebleed level growth that we had been putting we're now profitable. We're throwing off quite a bit of cash, it changes the type of investor that gets involved in these sort of companies. I don't want to prefaces of saying like, Spotify is a bad company now, it's just a different company into a different phase of its life. When I look at it, it's a solid company. It's generating a lot of free cash flow. Revenue right now high single digits. Maybe you're going to get low double digits on a growth surge, maybe a pricing increase. It's still a very quality business. But is that a company that merits 32 times, 33 times earnings? That's the question here. On that daily user growth, part of me almost says, "Is there no more worlds left to conquer?" Yes, it's growing, but it's become the dominant market share. As to lose point, like, who isn't using this service at this point?

Lou Whiteman: Funny, I'm not, so Spotify, call me. But I get it thrown in with my phone service. I guess there are at least one more world to cover. But Tyler, I think you're exactly right. I will say, shout-out to Spotify, because I think there's a better case here than there is for some. I'm going to get nasty letters, but Starbucks and some of these companies. I just think good company, bad stock. I think this is still a stock that works because I think it is a hybrid growth. I think they do have some levers to pull, but, yeah, I think that's it. That probably two things can be true here. It's still a good investable stock, but the valuation might need adjustment from here.

Travis Hoium: Yeah, 30 times earnings isn't crazy for a company that can continue to grow in the mid-teens. But I think you're right. How do you grow the business from here, and it's going to be a balance of how do you price a product where you have basically saturated the market? You're playing this game of do we want more monthly active users, or do we want a higher price per user? Because there is some elasticity in that market. You have competition from products like YouTube.

I think what we've learned with Spotify over the last few years is they're not going to be the next Google, for example, we're just going to keep tacking on new product after new product, add YouTube, add Waymo. Their ad product stinks that basically didn't grow year over year. That’s not a huge driver of their growth. Their video, I don't think is what they thought it maybe could be. It's just a solid business. It's just the kind of service that I'm going to sign up for and pay for for the next decade. As my kids get older, they'll eventually graduate into buying their own accounts. That's a good business. It can be fine for investors at 30 times earnings. I don't think it's a steal. If they ever get to the point where it's so cheap that they decide that they're going to buy back a whole bunch of stock, it could be really interesting, but this is going to be a little bit more ho-hum for investors, and a lot of times, that's not going to get a lot of headlines for you.

Tyler Crowe: It'll be interesting to see how you're saying that mid-teens growth, it's definitely worth playing. But as we were saying, not quite there yet, but there are some levers to pull, maybe fixing around the margins, ads, maybe figure out video. These are new initiatives, and some things aren't always perfect execution all the time. There is a path there, but not quite in the cards yet. A last question before we get out of here, guys, of the three companies we talked about today, Palantir, Caterpillar, Spotify, I think, based on what I've heard, I've gotten a good idea, which of these three companies is most attractive to you right now?

Lou Whiteman: If I was to buy one today, it would probably be Spotify, but I don't know if I really want to jump into any of these three.

Travis Hoium: I agree. It's the one that I own. It's the one where I can actually wrap my head around the valuation, and it's not as cyclical. It's more that I am not really interested in buying Palantir or Caterpillar today.

Lou Whiteman: Just so we're not boring, if it's a long enough time horizon, I'll take CAT. 

Tyler Crowe: We've got them on record, everyone, so you can lambast them in emails and comments later, and we'll figure that out from there.

As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards, and it's not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. Thanks for producer Dan Boyd and the rest of The Motley Fool team for Lou, Travis, and myself, thanks for listening, and we'll chat again soon.

Palantir Technologies Inc. (NASDAQ:PLTR) shares are trading higher on Thursday as risk-on appetite lifts AI-linked software names. The move also tracks lingering optimism around the company’s recent surge in U.S. commercial and government demand.

Palantir Technologies stock is building positive momentum. What’s driving PLTR shares up? What Is Driving Palantir’s Recent Surge?The latest narrative still centers on Palantir’s strong second-quarter backdrop, including 93% revenue growth and $1.22 billion in operating cash flow, alongside U.S. revenue growth of 115% to $1.57 billion.

U.S. commercial revenue grew 149% to $764 million, while the company’s government-AI positioning stayed in focus after the Pentagon’s Maven Smart System was described as supporting thousands of strikes against Iran and becoming the military’s primary AI operating system in March.

Management Speaks on Unprecedented AI Growth and Commercial ExpansionDuring last week’s earnings call, Chief Executive Officer Alex Karp highlighted that the unprecedented momentum across their U.S. commercial division stems directly from AIP bootcamps, which allow enterprise clients to convert prototype concepts into production-ready software in days rather than months.

Karp noted that demand in the domestic commercial market has expanded at a rate unlike anything in the company’s history, establishing Palantir as an indispensable operating system for modern business operations.

Alongside corporate growth, Palantir’s entrenched positioning within defense and intelligence frameworks continues to solidify its revenue foundation.

Chief Financial Officer David Glazer emphasized during the call that high-margin top-line expansion is driving exceptional cash generation, giving management the confidence to raise full-year guidance while maintaining strong operating discipline.

Palantir Stock: Key Levels To WatchPalantir is stretched above its trend gauges, trading 23% above its 20-day SMA ($143.31) and 15.9% above its 200-day SMA ($152.15), which often raises the odds of a cooldown or a sideways base rather than a straight-line continuation. The shorter-term structure remains constructive with the 20-day SMA above the 50-day SMA, but the death cross from February (50-day SMA below the 200-day SMA) is a reminder the longer-term trend only recently turned back up.

RSI is the cleaner momentum lens right now at 71.28, which signals the stock is in overbought territory and can be more vulnerable to sharp pullbacks or choppy consolidation if buyers pause. If momentum does keep pressing, traders will likely watch whether price can hold above recent breakout areas rather than giving back the bulk of the post-June rebound.

Key Resistance: $187.50 — a nearby ceiling where upside attempts can stall, sitting between current price and the $207.52 52-week high zone Key Support: $148.00 — a key area to defend, near the stock’s rising intermediate trend region and a level where buyers previously stepped in Palantir Technologies Benzinga Edge ScorecardBelow is the Benzinga Edge scorecard for Palantir Technologies, highlighting its strengths and weaknesses compared to the broader market:

Momentum: Bullish (Score: 74.08) — The stock is showing strong relative strength, consistent with its sharp move above key moving averages. Value: Bearish (Score: 1.98) — The market is pricing in a lot of future execution, leaving less room for error if growth expectations cool. Growth: Bullish (Score: 96.39) — Growth factors are a major tailwind, aligning with the company’s recent acceleration in U.S. commercial and overall revenue trends. The Verdict: Palantir Technologies’ Benzinga Edge signal reveals a classic High-Flyer setup, with growth and momentum doing the heavy lifting while valuation remains the clear trade-off. For longer-term holders, that mix often works best when the stock can consolidate above support and then resume higher, rather than extending further while already overbought.

PLTR Stock Price Movement TodayPLTR Stock Price Activity: Palantir Technologies shares were up 1.47% at $173.55 at the time of publication on Thursday, according to Benzinga Pro data.

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After Palantir Technologies (PLTR -0.17%) delivered an impressive second-quarter earnings report last week, the stock market rewarded its success with a big share price move. Palantir stock is up more than 35% over the last week, and its market cap has grown by more than $115 billion since July 31.

Those gains have analysts from Citi, Northland Securities, Mizuho Securities, and more upping their price targets, and some project that the data analytics company's shares could rise by nearly 50% over the next year. But Cathie Wood, founder and CEO of Ark Investment Management, isn't waiting around. Her asset management firm's family of exchange-traded funds (ETFs) have sold $21 million worth of Palantir stock since the company's Aug. 3 earnings report.

Why is Wood taking profits now? I believe it says a lot about her overall strategy.

Ark Invest CEO Cathie Wood. Image source: Getty Images.

Taking profits Wood began moving shares the day after the earnings report that wowed the market. Palantir's shares had jumped by 29% in a single day, so Wood's decision to take profits was well-timed.

Five of her ETFs sold off just over $21 million in Palantir stock over three days.

Fund

Market Value of Shares Sold Aug. 4, 2026

Market Value of Shares Sold Aug. 5, 2026

Market Value of Shares Sold Aug. 6, 2026

Total Market Value of Shares Sold Aug. 4-6

Ark Innovation Fund

$4.8 million

$6.1 million

$583,200

$11.48 million

Ark Next Generation Internet ETF

N/A

$1.6 million

$2.9 million

$4.50 million

Ark Autonomous Technology & Robotics ETF

N/A

$2.7 million

$191,700

$2.89 million

Ark Blockchain & Fintech Innovation ETF

$1.2 million

$200,700

N/A

$1.4 million

Ark Space & Defense Innovation ETF

N/A

$747,700

$79,200

$826,900

Data source: cathiesark.com. 

While that's a lot of shares, it was only a small percentage of the amount of Palantir stock in Wood's ETFs. Ark still holds $451 million in Palantir stock, making it the fifth-largest holding in her portfolio. The stock makes up 3.5% of Ark Invest's holdings.

Buying and selling is par for the course at Ark Ark's portfolios are actively managed, and Wood moves in and out of positions all the time. (She made more than 50 trades on Aug. 6 alone). Wood is known for her focus on companies pursuing disruptive innovation, primarily in technology, medicine, and finance, and her ETF's portfolios include many companies working in artificial intelligence, cloud computing, robotics, blockchain, and space exploration.

She also often rebalances her portfolios by trimming outsize positions. While Palantir isn't a megacap stock, it posted mammoth gains over the last week, making it a good candidate for trimming.

And thanks to the 25% one-day gain following Palantir's earnings report, Wood was able to take sizable profits that she could redeploy toward other opportunities that she believes are undervalued. Among the numerous stock purchases Ark made last week were Space Exploration Technologies, Cerebras Systems, Block, and Coinbase Global.

However, I think Palantir has much more short-term and long-term potential than any of those companies. SpaceX is one of Wood's favored holdings right now, with the second-greatest weighting in her company's ETFs. But shares of Elon Musk's company will likely be highly volatile as it invests heavily in data centers and AI infrastructure to build out its fledgling business.

I would much rather keep my money in Palantir and its highly successful AI-powered software platform, which the market is cheering for right now.

Today's Change

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Palantir's disruptive AI is changing how companies work There are few companies as disruptive as Palantir, which is teaching its customers how to best incorporate AI into their systems to make them more productive. Palantir's ontology system creates a digital twin of a client's operations for its AI to review, analyze, and recommend improvements.

"I think strategically what's really interesting to watch ... was they're not only helping their customers modernize their data, but they're actually helping customers kind of optimize and choose the best model," Tyler Radke, a senior equity analyst at Citi, said in an interview on BNN Bloomberg last week.

Palantir closed $3.37 billion in total contract value in the second quarter alone, signing 220 million-dollar deals, with 73 of those valued at least $10 million. That helps explain how its U.S. commercial revenue grew 149% in the second quarter, marking the fourth consecutive quarter of more than 100% revenue growth for that segment of the business.

Wood's philosophy works for her. But Palantir still has a long road ahead, and I think she's leaving money on the table by selling the stock now.

Palantir Technologies' (PLTR -0.37%) share price soared after the company delivered another quarter of exceptional revenue growth and continued improvements in profitability. CEO Alex Karp described the quarter as "otherworldly" in the company's earnings release, and investors sent the stock higher on the news.

There's no doubt that Palantir has produced phenomenal financial results, helping drive its valuation higher. However, investing is far more focused on what's ahead for a company. Palantir will have to continue delivering very strong quarterly earnings reports to keep pushing the stock higher from here.

Image source: Getty Images.

What will it take for Palantir stock to keep climbing? As Karp put it in his letter to shareholders, "Our business is compounding at a rate and scale that we have never before witnessed." Indeed, Palantir's 93% revenue growth was bolstered by even better growth among U.S. commercial customers (149% growth) and strong U.S. government sales (90%). Just as important, adjusted operating margin expanded to 62% from 60% in the prior quarter, indicating there's still plenty of leverage in scaling the business.

Today's Change

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-0.37

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Current Price

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Palantir also increased its full-year guidance, with revenue expected at $8.154 billion at the midpoint. That's up from the $7.656 billion management previously guided for. The confidence to raise guidance may come from strong net revenue retention, which came in at 157%, up from 150% in the first quarter. That signals that existing customers continue to spend more each quarter, which can drive significant revenue growth at Palantir's scale.

There's little doubt Palantir will continue to produce excellent operational results. The problem is, everyone already knows this. As a result, the stock trades for a very lofty valuation. The company's enterprise value is more than 45 times management's revenue guidance for 2026. Its forward price-to-earnings ratio sits around 100.

Those multiples will have to compress over time as growth eventually slows down. Management is already forecasting a slowdown in revenue growth in the back half of the year. Palantir's Rule of 40 score of 155 from the past quarter may represent its peak going forward.

Expectations are high for Palantir. That doesn't mean the SaaS stock can't meet those expectations. But for Palantir to deliver market-beating results over the next few years, it will have to exceed expectations. That's especially true given that its lofty valuation also means any disappointment in the company's future results could lead to a massive adjustment lower in the share price.

After the recent increase in price, there's even less room for error. I'd wait for another pullback in the stock before buying it.

Adam Levy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.

Just a few months ago, it seemed like every piece of good news pushed Palantir Technologies (PLTR +10.32%) stock lower.

The company kept reporting strong results. Demand for its artificial intelligence (AI) software continued to accelerate. Yet investors remained unimpressed. But something changed recently. After another blockbuster earnings report, Palantir stock surged rather than sank.

That doesn't necessarily mean the correction is over. But it may be the market's first signal that investor sentiment is beginning to change.

Image source: Getty Images.

It wasn't just a great quarter, but how the market reacted to it Palantir's second-quarter results were outstanding by almost any measure.

Revenue surged 93% year over year to $1.9 billion, while U.S. commercial revenue jumped 149% as more enterprises adopted its Artificial Intelligence Platform (AIP). Management also raised its full-year revenue guidance again, now expecting approximately 82% growth in 2026. Those numbers suggest the company's momentum is still accelerating, not slowing.

But here's what caught my attention: for months, investors responded to good news with skepticism. Strong earnings weren't enough because many believed the stock had simply become too expensive.

This time, the market reacted differently. Instead of focusing on valuation, investors rewarded Palantir's execution with a roughly 25% surge in its share price following the earnings release. That shift may be more important than the earnings themselves, as it may signal a change in investors' perception of the stock.

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Why the shift in investors' sentiment matters Experienced investors don't just study financial results. They also study how the market responds to those results. When great earnings fail to lift a stock, it often signals expectations are still too high. That was the situation that Palantir had been facing in the last few quarters.

But when the same kind of earnings suddenly trigger a strong rally, it can suggest much of the pessimism has already been priced in. That's not a guarantee the bottom is in, since share prices rarely move in straight lines.

But it can be an early sign that sellers are becoming exhausted and buyers are beginning to regain conviction.

In other words, the biggest change after Palantir's latest earnings wasn't necessarily the business. It was investor behavior.

The business continues to strengthen The market's reaction would mean very little if the underlying business were deteriorating.

Fortunately for shareholders, the opposite appears to be happening. Twelve months ago, investors were still debating whether enterprise demand for Palantir's AI platform would prove durable.

Today, that's unlikely to be the focus. Commercial customers are adopting the platform at a faster pace, revenue growth has accelerated from 85% in Q1 to 93% in Q2, and profitability hit a new record.

What's more, Palantir demonstrates that a company can grow rapidly even though it is already a giant by all measures. CEO Alex Karp even hinted that this is probably just the beginning of its longer-term growth.

Still, that doesn't mean the stock is cheap The improving sentiment doesn't eliminate the biggest risk, that Palantir still commands a premium valuation as investors expect years of exceptional growth. For perspective , Palantir trades at a price-to-sales (PS) ratio of 66 times.

That's both the opportunity and the challenge. If the company continues delivering quarters like its latest one, today's valuation could eventually prove reasonable. But if growth slows materially, investors could once again question whether the premium valuation is justified.

In other words, the central debate on Palantir's stock is not whether Palantir has a great business. The evidence increasingly suggests it does. The real question is whether that business can continue outperforming the lofty expectations already embedded in the stock price.

What does it mean for investors? So, is the worst finally over for Palantir stock? No one can answer that with certainty.

On one level, investors' sentiment has clearly improved since the Q2 earnings result.

Still, one quarter is likely too short a time for investors to make a call on the arrival of a new trend. Besides, the stock still trades at a sky-high valuation.

But if Palantir continues delivering exceptional results -- and the market continues responding positively -- it could suggest the recent correction over the last few quarters was less the beginning of a prolonged decline, and more a healthy reset in expectations.

For long-term investors, that's the signal worth watching in the coming quarters.

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The GraniteShares 2x Long PLTR Daily ETF (NASDAQ:PTIR) is ripping higher this session as the market — and especially technology stocks like Palantir Technologies (NASDAQ:PLTR | PLTR Price Prediction) — celebrated a weak jobs print that likely reduces the odds of a near-term rate hike by the Federal Reserve. This is especially important for stocks levered to the AI trade, as new compute requires enormous capex and therefore cheap debt. PTIR, a single-stock leveraged ETF that targets twice the daily return of Palantir shares, has had a fantastic week since Palantir reported blowout earnings on August 3rd, and today it’s up another 18%.

GraniteShares 2x Long PLTR Daily ETF (PTIR) Over the post-earnings window from August 3 through August 6, the fund gained 45%, and it is up 54% over the trailing week. This is a complex, single-stock-linked leveraged product distinct from a diversified index ETF. It seeks twice the daily performance of Palantir stock and resets that exposure at the end of each session, typically using total-return swaps on a cash and Treasury collateral base.

The mechanic matters. Because leverage is reset daily, returns compound off a new base each session, and over multi-day and multi-week horizons the fund’s performance drifts from a simple 2x of the underlying. Volatility decay works against holders during choppy stretches, which is why PTIR is best used as a short-term tactical instrument rather than a buy-and-hold vehicle. The trailing figures make the point plainly: PTIR is down 43% year to date and down 51% over the past year, even as Palantir itself is down only 12% year to date and 13% over one year. A supposed 2x fund lagging its underlying that badly over a year is compounding decay in action.

Palantir Technologies (PLTR) Palantir shares are quoted at $169.42, up 9% today and 28% over the trailing week. The Q2 report reset the growth story. Reported revenue of $1.94 billion grew 92.83% year over year, with U.S. commercial revenue at $764 million, up 149%, and U.S. government revenue at $809 million, up 90%. GAAP operating income was $912 million, a 47% margin, and net income reached $1.06 billion.

Guidance did the rest of the work. Full-year revenue was raised to a range of $8.15 billion to $8.158 billion, implying 82% year-over-year growth, with adjusted free cash flow guided to $4.5 billion to $4.7 billion. Q3 revenue was framed at $2.160 billion to $2.164 billion. CEO Alex Karp did not undersell it: “Demand for AI sovereignty has now been unleashed… This quarter was otherworldly: our U.S. commercial revenue grew 149% year-over-year, our overall revenue grew 93% year-over-year, and our Rule of 40 score climbed to 155%.” The beat marks Palantir’s 10th consecutive earnings beat.

What the Move Actually Tells You Same catalyst, two very different payoff profiles. Palantir’s fundamentals reset higher on a 46% EPS surprise and a raised full-year outlook, and the stock repriced accordingly. PTIR converted that single-day repricing into an outsized daily return because it is engineered to double Palantir’s session move. That amplification cuts both ways, and the fund’s 51% one-year decline against Palantir’s 13.16% one-year decline is the receipt for how daily reset mechanics behave when the underlying chops around. Use the product for what it is: a short-window tactical bet on Palantir’s next session rather than a proxy for owning the stock.

Contact [email protected] for any questions or corrections.

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SummaryI upgrade Palantir to Buy, as Q2 results provide strong medium-term revenue visibility and mitigate near-term AI commoditization risks.PLTR’s Q2 revenue growth (~19% sequentially) and raised full-year guidance ($8.15b) reduce downside risk and support consensus estimates through 2027.US commercial revenue acceleration (~149% YoY) demonstrates resilience against AI commoditization, while high net dollar retention (157%) underpins forward growth.International expansion remains a longer-term concern, but robust existing customer growth supports a 3–18 month Buy thesis despite elevated valuation (forward PS ~50x). Tom Werner/DigitalVision via Getty Images

I have been maintaining a Hold rating on Palantir (PLTR) since November last year, and the caution on deploying fresh capital was not as much the strength of the business as valuations. The

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Every prompt employees write, every workflow they automate and every business process they refine can reveal valuable insights about how a company operates. According to Palantir, that information could become just as valuable as the underlying data itself.

Palantir’s Warning: Your Competitive Edge Could Be at RiskTaylor delivered one of the strongest messages from the earnings call when describing what he considers an unfolding trend across corporate America.

“Companies are paying to give away their most important secrets, the very basis for their competitive advantage, ultimately contributing to the commoditization of their own businesses as their secrets become the training data embedded in the foundations of all future models,” he said.

Palantir argues the issue goes beyond simply protecting company data. It says businesses also risk exposing the expertise, workflows and decision-making processes that make them unique, making control over that information increasingly important as AI adoption grows.

That concern is becoming a key selling point for Palantir’s software.

Taylor said enterprises are increasingly demanding what the company calls “AI sovereignty”—an approach that allows businesses to retain ownership over the data, logic, actions and security behind their AI systems. As he put it, “An organization’s data is its treasure.”

Why Palantir Says Companies Are Changing Their ApproachChief Executive Officer Alex Karp said businesses are only now beginning to appreciate how much valuable information they may be handing over as they expand their use of AI.

During the earnings call, Karp argued that the value isn’t limited to the information companies store internally. It also includes the knowledge generated as employees interact with AI systems and refine how work gets done. He said businesses are realizing that this information “is probably more valuable than just the data in my enterprise.”

Later in the Q&A session, Karp said companies increasingly understand that they are “transferring their data, their prompts, the way they run their business, their expertise, to a third party,” adding that customers now want to better understand how they can keep greater control over that information.

Why Investors Should WatchFor Palantir, this isn’t just a philosophical argument. The Miami-based company reported 149% year-over-year growth in U.S. commercial revenue during the second quarter, with management arguing that more businesses are embracing its approach to keeping AI systems—and the valuable knowledge they generate—under their own control rather than relying entirely on third-party platforms.

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Palantir CEO Alex Karp says the company operates with a "miniscule and shrinking" sales team. John Lamparski/Getty Images Palantir CEO Alex Karp took a victory lap over the company's explosive growth, saying it managed to boost its commercial business using a "miniscule and shrinking" sales team.

In the shareholder letter accompanying Monday's second-quarter results, Karp said it was another case of Palantir ignoring the norms of growing a business.

"On a quarter-by-quarter basis, our US commercial business grew 28%. Such growth — indeed, such acceleration — gives the impression that what others might require a year or even longer to achieve, we can do in 90 days," Karp wrote.

"It must be noted that we have achieved these results with a minuscule and shrinking sales head count, another way in which we have discarded conventional wisdom in favor of our own, unique path," he added.

Palantir posted $1.9 billion in quarterly revenue globally, up 93% year over year, and $1.1 billion in profit. The company earned more in profit last quarter than it booked in total revenue a year earlier, Karp said.

US commercial revenue hit a record $764 million, a 149% jump from a year earlier and 28% growth from the prior quarter alone. Total US revenue reached $1.6 billion, up 115%.

He has put numbers to the sales claim before. On May's first-quarter call, Karp said Palantir had roughly 70 salespeople and that only seven of them really sell, work he said a comparable company would need 7,000 people to do. His May letter put annualized revenue per employee at $1.5 million.

Karp's comments reflect a growing trend in the AI world: the rise of so-called "Tiny Teams" — where companies use AI to do much of the work traditionally done by human employees, cutting both costs and head count.

Palantir's own head count is a more complicated case. Karp told CNBC in 2025 that he wanted Palantir to grow tenfold while reducing staff to about 3,600. The 2025 annual report instead listed 4,429 full-time employees, up 13% on the year.

Karp has distinguished Palantir's approach from outright job cuts. On the tech show TBPN in June, he said executives who boast that AI lets them fire much of their staff might as well sign up for "the Bernie Sanders manifesto."

Karp said the US commercial business, despite the growth, is still "just nascent."

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Georgia Hennessy You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.

Georgia is a fellow at Business Insider's London office.Before joining Business Insider, she worked at Japan's largest newspaper, The Yomiuri Shimbun, and interned at the Financial Times. She is an NCTJ-qualified journalist with a degree in Philosophy from the University of Birmingham. You can contact her via email at [email protected]

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Palantir Technologies Inc. (NASDAQ:PLTR) will release its second quarter earnings report after the closing bell on Monday, Aug. 3.

Analysts expect the Aventura, Florida-based company to report quarterly earnings of 35 cents per share, up from 16 cents per share in the year-ago period. The consensus estimate for Palantir’s quarterly revenue is $1.81 billion. It reported $1 billion last year, according to Benzinga Pro.

On July 7, Palantir Technologies said it is expanding its presence in Mexico through a partnership with GNP Seguros, the largest insurer in the country.

Shares of Palantir gained 0.7% to close at $123.06 on Friday.

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