PLTR Goes Nuclear: AI-Fueled Quarter Blows Past Wall Street

Palantir Technologies PLTR has once again impressed Wall Street with a blowout second-quarter 2025 earnings report. The company not only delivered better-than-expected earnings and revenue but also achieved a milestone: its first-ever billion-dollar quarter.

Fueled by its fast-expanding Artificial Intelligence Platform (AIP) and surging demand from both government and commercial sectors — especially in the United States — PLTR’s growth trajectory looks more promising than ever. The company’s robust guidance for the rest of the year further amplified sentiments, sending shares to an all-time high of $176.33 in yesterday’s trading.

With shares more than doubling year to date and up over 500% in the past 12 months, PLTR is positioning itself as a top AI stock to watch.

PLTR Delivers Blockbuster Billion-Dollar Revenue Quarter

Palantir posted second-quarter 2025 revenues of $1 billion, a 48% year-over-year surge that easily beat the Zacks Consensus Estimate of $938.3 million. This was not only a clear beat but also the first time the software firm crossed the $1 billion quarterly revenue threshold, a major psychological and financial milestone.

Earnings per share came in at 16 cents, beating expectations by 2 cents and jumping a whopping 78% from the year-ago quarter. Adjusted EBITDA hit $470.9 million, up 69% from the prior year, with a striking adjusted EBITDA margin of 47%, up 800 basis points year over year.

Geographically, the U.S. market remains the primary driver of PLTR’s growth narrative. U.S. revenues grew 68% year over year to reach $733 million. Within that, U.S. commercial revenues surged an eye-popping 93% to $306 million, while U.S. government business rose 53% to $426 million.

Palantir's CEO Alex Karp described the quarter as "phenomenal," emphasizing that the company achieved a Rule of 40 score of 94%, a rare and elite threshold in software. The Rule of 40 combines revenue growth and profit margin; if the sum exceeds 40%, the Software business is healthy. Notably, PLTR closed 157 deals worth at least $1 million, with 42 deals exceeding $10 million, showcasing robust customer traction.

AIP Driving PLTR’s Commercial Growth Engine

The core catalyst behind Palantir’s explosive growth is its Artificial Intelligence Platform (AIP), which is fast becoming the company's primary growth engine. In fact, in just the first quarter, U.S. commercial revenue jumped 71% YoY and crossed the $1 billion annual run rate milestone. That momentum carried into the second quarter, pushing U.S. commercial growth to 93% YoY.

AIP enables clients to integrate autonomous AI agents directly into operational workflows, allowing organizations to make decisions faster and improve productivity by magnitudes, not just percentages. While many competitors focus on AI model development, PLTR is excelling in deployment, a crucial differentiator. It offers a turnkey AI solution that’s enterprise-ready from day one.

Palantir’s AIP bootcamps — short, intensive implementation workshops — have played a key role in accelerating adoption. These sessions help clients quickly move from onboarding to deploying AI in production, drastically reducing time-to-value. The feedback has been overwhelmingly positive, with clients appreciating AIP’s user-friendly interface, scalability, and immediate business impact.

Thanks to AIP, the total U.S. commercial contract value skyrocketed 222% YoY, while the remaining deal value climbed 145% to $2.79 billion. Customer count also grew 43% year over year, underscoring PLTR’s ability to scale rapidly while maintaining high satisfaction.

Strong Guidance and PLTR’s Path Ahead

Following the record-setting quarter, Palantir raised its full-year 2025 revenue guidance to a range of $4.14 to $4.15 billion, up from a prior estimate of $3.90 billion. For the third quarter of 2025, the company expects revenues of about $1.085 billion, once again above the current consensus expectations of $989.44 million. If achieved, this would mark the highest sequential revenue growth in Palantir’s history.

Additionally, PLTR forecasts adjusted income from operations between $1.91 billion and $1.92 billion for the year. Adjusted free cash flow is projected between $1.8 billion and $2 billion, a significant war chest that provides flexibility for expansion and R&D.

On the balance sheet, Palantir remains financially strong, ending the quarter with $929.5 million in cash and equivalents, despite being down from $2.1 billion at the end of 2024 due to ongoing investments. Operating cash flow for the quarter was a healthy $539.3 million, reflecting the firm’s profitability and operational efficiency.

PLTR’s performance stands out in an increasingly crowded AI space, where many companies are still experimenting with pilot deployments. Palantir’s strategy of making AI immediately useful — through production-ready agents and scalable platforms — has created a distinct moat around its commercial and government businesses.

As AI continues to transform the software landscape, Palantir is one of the few players capitalizing not just on the hype but on the tangible utility of AI, delivering operationalized solutions that clients are eager to adopt.

PLTR, NVDA, and AI: The Trio Leading AI Revolution

Palantir’s meteoric rise mirrors the broader AI surge, lifting peers like NVIDIA NVDA, though not all names have moved in unison. NVDA, up 32% over a year, the undisputed backbone of AI infrastructure, continues to see insatiable demand for its GPUs. Meanwhile, C3.ai AI has struggled, with its stock down 32% year to date, reflecting market skepticism around its growth execution despite its expanding enterprise footprint. While PLTR excels in deployment, NVDA powers the backend, and AI tackles the front-end application layer. For investors bullish on PLTR, NVDA’s dominance and AI’s evolving strategy remain worth watching as this transformative tech cycle unfolds.

PLTR currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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