Key Takeaways
- Palantir beat second-quarter earnings and revenue expectations, lifting full-year guidance.
- U.S. commercial revenue surged 149%, driving strong AI business growth.
- Shares jumped after results as investors welcomed stronger financial performance.
Palantir Technologies reported stronger-than-expected second-quarter earnings Tuesday, raised its full-year Palantir revenue forecast and saw its stock jump nearly 10% in after-hours trading as growth in its U.S. commercial business accelerated.
The software company reported adjusted earnings of 41 cents per share for the fiscal second quarter, topping Wall Street expectations of 35 cents. Palantir revenue reached $1.94 billion, exceeding analysts’ estimates of $1.8 billion.
The company increased its full-year Palantir revenue guidance to $8.16 billion from its previous forecast of $7.65 billion to $7.66 billion, reflecting continued demand for its artificial intelligence software, a trend also seen among other AI-driven firms raising their outlook this year.
“This quarter was otherworldly: our U.S. commercial revenue grew 149% year-over-year, our overall revenue grew 93% year-over-year,” Chief Executive Officer Alex Karp said in a statement. He added that “the sovereign AI revolution makes us very optimistic about the future.”
Government business and large deals expand
Palantir said its U.S. government revenue increased 90% from a year earlier and rose 18% from the previous quarter, extending momentum across both its commercial and government businesses and further lifting overall Palantir revenue.
The company closed 220 contracts valued at $1 million or more during the quarter. Of those, 98 deals exceeded $5 million, and 73 were worth more than $10 million.
“Record highs across the board,” Chief Revenue Officer and Chief Legal Officer Ryan Taylor told analysts during the company’s earnings call.
Palantir also reported adjusted free cash flow of $1.22 billion, surpassing analyst estimates of about $1 billion. Free cash flow remains one of the most closely watched financial measures for AI software companies because it reflects their ability to generate cash while investing in growth.
Earlier this year, the company’s Maven Smart System became an official Pentagon program of record, strengthening Palantir’s role in long-term U.S. military artificial intelligence projects.
Analysts remain positive despite yearly decline
Palantir said businesses are increasingly seeking AI platforms that deliver measurable business results rather than simply providing access to large language models.
Taylor said companies using Palantir’s software are seeing stronger returns than organizations relying only on AI models. “In contrast, enterprises that are not using Palantir are seeing their token meters spinning endlessly, just to get slop without any correlation to value,” he said.
Despite Tuesday’s gains, Palantir shares remain down more than 30% for the year after broader concerns earlier in 2026 weighed on AI software stocks.
Wall Street analysts continue to maintain a positive outlook on Palantir revenue, per the earnings report, with the stock currently carrying 22 Buy ratings, nine Hold ratings and two Sell ratings.
Last month, D.A. Davidson analyst Gil Luria upgraded the stock to Buy with a price target of $175, citing Palantir’s AI orchestration platform and its ability to switch between AI models with minimal disruption..
