Palantir Technologies' second quarter beat and raise sent shares to an all-time high in early trading on Tuesday. Strong revenue growth in the software maker's U.S. government and commercial businesses boosted Q2 financial results for Palantir stock.
Reported after the market close on Monday, Palantir earnings for the June quarter were 16 cents on an adjusted basis, up 78% from a year earlier. Revenue climbed 48% to just over $1 billion, the maker of data analytics software said.
Wall Street analysts had predicted earnings of 14 cents a share on revenue of $938 million for Palantir stock.
In addition, Palantir said U.S. government revenue in Q2 rose 53% to $426 million. Analysts had projected U.S. government revenue of $392.7 million.
In addition, Palantir said U.S. commercial revenue jumped 93% to $306 million, topping estimates of $266 million.
Palantir Stock: 2025 Guidance Hiked
"The U.S. commercial business, which remains a key focus for the bulls, grew 93% year-over-year — well beyond buyside expectations with U.S. commercial total contract value coming in at $843 million, up 222%," said Wedbush analyst Daniel Ives in a report.
For the September quarter, Palantir forecast revenue of $1.085 billion at the midpoint of guidance, topping estimates of $982 million.
For full-year 2025, Palantir raised its revenue outlook to a range $4.14 billion to $4.15 billion versus estimates of $3.89 billion. Palantir now expects 45% full-year sales growth, up from 36%.
Q2 results impressed Citi analyst Tyler Radke.
"A truly exceptional Q2 was highlighted by a much larger revenue beat, accelerating bookings and a massive raise to second half growth," he said in a report. "Profitability also came in well ahead with a 15% beat and record high operating margins. While we were positive on fundamentals into the quarter, the magnitude of the upside and the bookings/backlog was well above even the highest of expectations, and even more impressive vs. the rest of software. We expect Palantir stock to hold gains given the blowout performance."
Deutsche Bank Upgrades Palantir Stock
At Deutsche Bank, analyst Brad Zelnick on Tuesday upgraded Palantir stock to hold from sell.
"We were admittedly quite late to the party in appreciating how Palantir's platform is uniquely positioned for AI and changed the trajectory of the company," he said in a report. "For several quarters now we've more fully credited this progress but struggled with valuation that remains at an order of magnitude premium to all public Software peers. Current valuation is still very challenging to wrap arms around, but our conversations with multiple customers and the company over the past several months have further reinforced the view that something special is going on here within the context of a massive platform shift."
On the stock market today, Palantir stock climbed 7.9% to close at 173.27. In intraday trading, shares hit a new all-time high of 176.33. With Tuesday's gain, shares have surged 119% in 2025.
Palantir Stock Valuation Debated
Further, Palantir is the top performer on the S&P 500 in 2025, after leading the benchmark index last year.
But the lofty valuation of Palantir stock remains a key investor issue, Wall Street analysts say. Palantir holds the highest price-to-earnings ratio on the S&P 500 and trades at roughly 80 times per-share sales expected for the next year.
"While fundamentals have strengthened meaningfully in recent quarters, Palantir now trades at 74 times 2026 estimated revenue," said Jefferies analyst Brent Thill in a report. "Even under a bullish scenario where the company accelerates to a 55% four-year compound annual growth rate, the stock would need to trade at 25 times 2028 estimated revenue just to justify its current price, highlighting the disconnect between valuation and achievable growth."
AI Platform Growth
Meanwhile, Palantir's data analytics software has been utilized by government customers for intelligence gathering, counterterrorism and military purposes. It's now targeting generative artificial intelligence applications in health care, energy and manufacturing. Palantir is among artificial intelligence stocks to watch.
Palantir continues to make progress with its "Artificial Intelligence Platform," initially rolled out in early 2023. In June, Palantir hosted its seventh artificial intelligence conference for customers, with many new companies taking part.
"We see the U.S. customer count growth of 64% year-over-year growth, with only about 10% increase in headcount, as soothing concerns that growth is capped by the number of forward deployed engineers (FDEs) PLTR can maintain," said Bank of America analyst Mariana Mora in a report. "We expect new customer growth will continue as Palantir remains the best in class for deploying and operationalizing AI into enterprises. Even with the growth, we expect the scaling challenges to remain manageable with use-cases scaling exponentially."
Palantir Stock Technical Ratings
Also, Palantir stock holds a Composite Rating of 99 out of a best-possible 99, according to IBD Stock Checkup. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
PLTR stock owns an Accumulation/Distribution Rating of B. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. A+ signifies heavy institutional buying; E means heavy selling. Think of a C grade as neutral.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
