Key Points
Palantir delivered an eighth consecutive quarter of accelerating revenue growth.
The company's strong performance continues to confound skeptics.
Palantir's valuation is egregious and not for the faint of heart.
Shares of Palantir Technologies (NASDAQ: PLTR) charged out of the gate on Tuesday, spiking as much as 9.8%. As of 10:50 a.m. ET, the stock was still up 8.3%.
The catalyst that sent the artificial intelligence (AI) software and data mining specialist surging to new heights was the company's quarterly financial report and bullish commentary that made it clear that the AI revolution is alive and well.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »
Image source: Getty Images.
Accelerating revenue growth
In the second quarter, Palantir generated revenue growth that accelerated to 48% year over year (and 14% sequentially) to a record $1 billion. This resulted in adjusted earnings per share (EPS) of $0.16, which soared 78%.
To give the results context, analysts' consensus estimates were calling for revenue of $939 million and adjusted EPS of $0.14, so Palantir cleared both hurdles with room to spare.
The headliner was the U.S. commercial segment, as new customers continued to flock to Palantir's Artificial Intelligence Platform (AIP). Revenue for the segment soared 93% year over year and 20% quarter over quarter to $306 million and now represents nearly 31% of the company's total revenue.
That's not all. Palantir's U.S. commercial customer count jumped 64% year over year and 12% sequentially, while the segment's total contract value surged 222% to $843 million. Furthermore, the company's remaining performance obligation (RPO) -- or contractually obligated revenue not yet included in sales -- jumped 77% to $2.42 billion. Not only did the company add plenty of new customers to its rolls, but existing customers spent more, as evidenced by Palantir's net dollar retention rate of 128%.
Beat and raise
Investors have feared the AI revolution would lose steam, but CEO Alex Karp put that issue to bed. In Palantir's quarterly shareholder letter, the chief executive said, "This is still only the beginning of something much larger and, we believe, even more significant."
As if to put an exclamation point on the results, the company raised its full-year guidance, far exceeding Wall Street's expectations. Management is calling for revenue of roughly $4.146 billion at the midpoint of its guidance (up from $3.895 billion), which would represent growth of 44%. Palantir also raised its outlook for U.S. commercial revenue to increase at least 85%.
The valuation is still a major stumbling block, with the stock currently selling for 246 times next year's expected earnings. That said, the AI revolution continues to gain steam, with Palantir a key provider of the technology.
Should you invest $1,000 in Palantir Technologies right now?
Before you buy stock in Palantir Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palantir Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $631,505!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,103,313!*
Now, it’s worth noting Stock Advisor’s total average return is 1,039% — a market-crushing outperformance compared to 181% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of August 4, 2025
Danny Vena has positions in Palantir Technologies. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.