Palantir revenue climbs 93% to $1.94bn, raises full-year guidance, stock gains 25%

Financial results

Palantir Technologies reported second-quarter revenue of $1.94 billion, a 93 percent increase from the same period a year earlier. Net income reached $1.06 billion, up 55 percent year on year. US commercial revenue grew 149 percent, while revenue from US government contracts rose 90 percent to $809 million. Total US revenue was $1.57 billion, more than double the prior-year quarter. Existing clients increased their spending by 57 percent. Chief Executive Alex Karp highlighted that the company's "rule of 40" score, combining revenue growth and operating margin, hit 155, compared with an average of 30 for S&P 500 companies. The company closed 220 deals worth at least $1 million, 98 worth at least $5 million, and 73 worth at least $10 million, with total contract value reaching $3.37 billion.

Guidance raised

Palantir lifted its full-year 2026 revenue forecast to between $8.15 billion and $8.16 billion, up from a previous outlook of under $7.7 billion. The new guidance implies overall revenue growth of about 82 percent year on year. US commercial revenue is now expected to grow at least 134 percent to $3.42 billion. The sharp upgrade reflects accelerating demand from both business and government clients.

CEO's AI sovereignty message

Chief Executive Alex Karp described the quarter as "otherworldly" and said demand for AI sovereignty has been "unleashed." He positioned Palantir as a counterweight to large AI model developers, arguing that customers' proprietary data should never become training material for future models.

This quarter was otherworldly: our US commercial revenue grew 149 percent year-over-year, our overall revenue grew 93 percent year-over-year. Demand for AI sovereignty has now been unleashed.

Karp also stressed that Palantir is the only company that has demonstrated it can turn tokens into actual economic value. He noted that the US business is expanding at an "unrelenting and dizzying pace."

Our customers trust us to give them maximum control over their operations, their data and their decisions. Their competitive advantage should never become training data for future models.

Market reaction

Palantir shares gained more than 25 percent on Tuesday, making the stock the best performer on the Nasdaq-100 and the most actively traded. The rally followed a 14 percent after-hours gain on Monday. Until Monday's close, investors had erased $122 billion from its market capitalisation this year, a loss exceeded by only Tesla, Meta Platforms and Oracle among S&P 500 companies. Despite the jump, the stock remains below its level at the start of 2026. The company's enterprise value stands at about $375 billion. Analysts at Jefferies cautioned that the high valuation leaves no room for missteps, and that growth outside the US is slowing. Citigroup analysts said the results reinforce Palantir's position as one of the clearest beneficiaries of enterprise AI adoption.

Controversy and government ties

Palantir's rapid growth has drawn scrutiny over its work with government agencies. Founded in 2003 by Alex Karp and Peter Thiel, the company opened its first office in Israel in 2015 and has since expanded its military ties. Its software is used by US Immigration and Customs Enforcement to identify individuals for deportation, linking data from licence plates, social media, biometrics and phone records. The company also holds multibillion-dollar contracts with the Pentagon and the Department of Homeland Security, and its tools have been deployed in the Iran conflict. In Israel, Palantir expanded its partnership with the military in January 2024, supporting operations in Gaza and the occupied West Bank. According to the monitoring group Open Intel, the company has recruited former members of Israel's Unit 8200 cyberintelligence division, and its software integrates intercepted communications and satellite imagery to help generate targeting lists. Palantir UK reiterated the company's support for Israel in a statement to Al Jazeera earlier this year. The company has also secured major contracts with the UK government.