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Published on
August 5, 2025
5 min read
Palantir Stock Surge 4% After Q2 Revenues Hit the $1 Billion Mark
Palantir stock surged by more than 4% on Tuesday after the data software firm’s revenue rose by 48% in the second quarter, compared to the same period a year earlier. According to Yahoo Finance, Palantir’s revenue surpassed analyst estimates to reach the $1 billion mark for the first time.
The Palantir Valuation Debate
Palantir’s stock rise came months after the company experienced a 12% drop in its share prices in May. The stock plunge happened a day after the tech company released its Q1 results. At the time, Palantir’s stock dropped after sales in its global commercial business declined and investors questioned its valuation. The company’s CEO Alex Karp reflected on the company’s relationship with investors in his letter to shareholders.
“The skeptics are admittedly fewer now, having been defanged and bent into a kind of submission,” Karp wrote.
Palantir’s stock has gained over 110% this year compared to S&P 500’s 7.4% average gain. Although some investors still have concerns regarding the company’s valuation, its stock continues to trade at historically high levels.
“We cannot rationalize why Palantir is the most expensive name in our software coverage. Absent a substantial beat-and-raise quarter elevating the [near term] growth trajectory, valuation seems unsustainable,” Analyst Rishi Jaluria from RBC Capital Markets wrote before Palantir published its Q2 earnings.
A Higher Annual Revenue Forecast
In its Q2 results, Palantir announced $0.16 in earnings per share, which is a 77% increase compared to the same quarter a year earlier. The software firm increased its annual revenue outlook to between $4.14 billion and $4.15 billion, which is higher than YoY analyst estimates of $3.91 billion.
Palantir informed shareholders that it had closed contract deals valued at $2.27 billion in the quarter under review. This is 140% more compared to the same quarter a year ago. In June 2025, Palantir announced an AI partnership with a nuclear company to develop software for nuclear construction.
According to the software company, its financial success in Q2 was driven by integration of AI in its products. “It has been a steep and upward climb, an ascent that is a reflection of the remarkable confluence of the arrival of language models, the chips necessary to power them, and our software infrastructure, one that allows organizations to tether the power of artificial intelligence to objects and relationships in the real world,” Karp said.
A Phenomenal and Consequential Quarter
The company’s Q2 results exceeded analysts’ projections of $939 million. Palantir has attributed the increase to strong US revenue that rose by 68% to reach a high of $733 million. Reflecting on Palantir’s Q2 financial performance, Karp said it was both ‘phenomenal’ and ‘consequential’.
“This was a phenomenal quarter. We are guiding to the highest sequential quarterly revenue growth in our company’s history. For a startup, even one only a thousandth of our size, this growth rate would be striking, the talk of the town. For a business of our scale, however, it is, we continue to believe, nearly without precedent or comparison,” Karp said.
The company’s US commercial revenue rose 93% year on year to stand at $306 million. Palantir also generated $426 million of its second quarter revenue from the US government, representing a 53% increase from the same quarter last year. Revenue from the two sources surpassed analyst estimations, which were $273 million and $391 million respectively.
Last week, Palantir announced that it had consolidated 15 contracts and 60 related contracts into a single deal valued at $10 billion with the US Army. The company will deliver the contracts over a period of 10 years. Dan Ives, an analyst at Webdush termed the contract “one of the largest ever Department of Defense software contracts in US history.”
The deal is designed to reduce costs for the US government and may not increase Palantir’s profit margins. However, it forms a solid basis for future government deals.
