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Software giant Palantir Technologies (PLTR) recently reported its second-quarter results for fiscal 2026, which soared past expectations, leading to a whopping 29.5% intraday gain on Aug. 4. The company’s revenue climbed 93% year-over-year (YOY) to $1.94 billion. Moreover, the commercial expansion has shifted into a different gear, highlighting that Palantir is actually experiencing commercial popularity.
Palantir CEO Alex Karp has repeatedly pointed to its sovereign artificial intelligence (AI) approach as a tailwind. As AI costs increase, investors are seemingly not favoring the tokenmaxxing strategy of frontier AI models like those of Anthropic and OpenAI. Karp is of the opinion that control over data is paramount, as there are risks of handing the creators of LLMs crucial enterprise data.
In this sense, Palantir’s approach has strayed from the industry. However, it has also kept the company’s growth story intact, as its entire business has nearly doubled in the span of twelve months.
About Palantir Stock
Palantir Technologies is a software company that develops data integration and analytics platforms used by government agencies and commercial clients to turn large, complex datasets into actionable decisions. Its products support operations such as intelligence analysis, risk management, and workflow automation across sectors including defense, healthcare, manufacturing, and finance. Headquartered in Aventura, Florida, Palantir has a market capitalization of $390 billion.
While Palantir has come out of the red zone following its stellar quarterly results, it’s down 8.09% over the past 52 weeks and remains down 10.41% year-to-date (YTD). That’s because the stock’s valuation has gotten ahead of its fundamentals. Despite strong growth, investors have been reluctant to keep paying premium multiples after a huge run-up. The company’s shares had reached a 52-week low of $106.37 on June 25, but are up 51% from that level.
Palantir’s stock currently trades at a forward-adjusted price-to-earnings (non-GAAP) ratio of 103.06 times, which is significantly higher than the industry average of 24.34 times.
Palantir’s Q2 Results Surpassed Expectations, Showcasing Robust Growth
The recent Q2 results have snuffed out any fears of a software slowdown. As already stated, Palantir’s revenue increased 93% YOY to $1.94 billion, which was higher than the $1.81 billion that Wall Street analysts had expected. The top-line expansion mainly stemmed from its U.S.-based operations, with revenue increasing by 115% YOY to $1.57 billion. This, in turn, was based on solid commercial expansion, as U.S. commercial revenue climbed 149% to $764 million.
Customer accumulation also remains at a high. In Q2, Palantir closed 220 deals of at least $1 million, 98 deals of at least $5 million, and 73 deals of at least $10 million. Turning to its profitability, we see a robust landscape. Its adjusted operating income was at $1.19 billion, reflecting a 62% margin. The reported adjusted EPS of $0.41 surpassed the Street-expected $0.35.
The largest takeaway from such robust results has been Palantir’s commercial expansion, and this is expected to continue. For fiscal 2026, the company raised its U.S. commercial revenue guidance to more than $3.42 billion, representing a growth rate of at least 134%. Moreover, with a rule of 40 score of 155%, Palantir is enjoying top-line growth without cutting corners regarding profitability.
Wall Street analysts also expect Palantir’s bottom line to grow robustly. For the current fiscal year, profit is expected to increase by 88.9% annually to $1.19 per diluted share, followed by a 39.5% growth to $1.66 in the next fiscal year.
What Do Analysts Think About Palantir’s Stock?
Post its quarterly results, analysts have reaffirmed their ratings on Palantir’s stock. Piper Sandler analysts reiterated an “Overweight” rating on the stock and a $230 price target, noting U.S. commercial revenue growth. Piper Sandler has also projected that commercial revenue would exceed government revenue as soon as the third or fourth quarter.
Deutsche Bank analysts upgraded the stock from “Hold” to “Buy” based on the exceptional Q2 results. Analyst Brad Zelnick said that the quarterly results were strong even by Palantir’s anomalous standards. According to Zelnick, the company is operating several steps ahead of the other software names in converting AI demand into real customer value.
Wall Street remains soundly bullish on Palantir’s stock, with analysts awarding it a consensus “Moderate Buy” rating overall. Of the 29 analysts rating the stock, a majority of 21 analysts have given it a “Strong Buy” rating, while six analysts are taking the middle-of-the-road approach with a “Hold” rating, one analyst suggested “Moderate Sell,” and one analyst gave a harsh “Strong Sell” rating. The consensus price target of $188.85 represents a 18.1% upside from current levels, while the Street-high price target of $255 indicates a 59.4% upside.
On the date of publication, Anushka Dutta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
