Key Takeaways:
Palantir Technologies shares have surged 43% over the past month to $173.75 after Q2 revenue grew 93% to $1.935 billion, beating consensus estimates.
"Demand for AI sovereignty has now been unleashed," CEO Alex Karp said, committing to keep company-wide growth at or above U.S. commercial rates for the next 18 months.
Q2 EPS came in at $0.41 versus a $0.28 estimate. U.S. commercial revenue jumped 149% year over year to $764 million, while U.S. government revenue rose 90% to $809 million. Net income more than tripled to $1.1 billion, producing a net margin above 50%. Management raised full-year revenue guidance to $8.154 billion at the midpoint, its largest-ever full-year guidance raise. Rule of 40 hit 155%, net dollar retention reached 157%, and adjusted free cash flow margin ran at 63%. The company closed a record $2.13 billion in U.S. commercial deals during the quarter, and Q3 guidance midpoint of $2.162 billion implies 12% sequential growth.
The stock sits roughly $33 below its 52-week high of $207.52. The 24/7 Wall St. price target of $217.16 implies 24.75% upside with a BUY rating at 90% confidence. Options positioning around the September 18 expiration carries 254,823 call contracts, suggesting traders expect a large directional move. The bull case points to $225.86, roughly 30% above the current price. The stock has gained more than 65% from its June 25 low, though it remains roughly flat year to date at -1.05%.
PLTR trades at a P/E of 249 and forward P/E of 112, versus a sector median of 23.19. Stock-based compensation of $265 million in Q2 continues to dilute holders. Post-earnings history is choppy: Q1 26 and Q4 25 both saw negative one-week reactions despite beats. Reddit sentiment has turned bearish in recent observations, with composite sentiment at 45.37, neutral. The bear case puts the stock at $180.73 over 12 months. A September 25 put option with a $170 strike was priced at $5.90 per contract when the stock traded at $180.85.
Peer Comparison
ServiceNow grew Q2 revenue 24% to $3.99 billion, with ServiceNow AI crossing $1 billion in annual contract value. Snowflake grew 33.5% in Q1 FY2027 and remains GAAP unprofitable. Palantir's 93% growth rate outpaces both, and it is the only one of the three producing GAAP net income at scale. Palantir's market cap of $399.75 billion compares with $131.1 billion for ServiceNow and $109.6 billion for Snowflake. Management projects $10.8 billion in revenue and $3.6 billion in earnings by 2028, framing the current guidance raise within a longer-term trajectory.
The guidance raise indicates management expects AI demand to accelerate through the back half of 2026. Investors will watch the September 18 options expiration and Q3 commentary for continued AIP adoption as key events. The setup weakens if stock-based compensation growth outpaces revenue growth or if the multiple compresses below 100x forward.
This article is for informational purposes only and does not constitute investment advice.
