Key Highlights

  • Palantir shares are indicated up 17.22% in pre-market trading at $147.29, following a blowout second-quarter report.
  • Second-quarter revenue jumped 93% year over year to $1.94 billion, topping the $1.80 billion consensus, with adjusted EPS of $0.41 beating the $0.34-0.35 estimate.
  • Palantir raised full-year 2026 revenue guidance to $8.15 billion to $8.16 billion, well above the $7.77 billion Street estimate.
  • U.S. commercial revenue grew 149% and U.S. government revenue grew 90%, with the company posting a Rule of 40 score of 155.
  • The stock had pulled back roughly 40% from November highs on valuation concerns and AI-agent competition worries before this report.

What's Driving the Pre-Market Move

Palantir (NASDAQ:PLTR) shares are indicated up 17.22% in pre-market trading at $147.29, after closing regular trading up 2.10% at $125.65 on Monday as investors positioned ahead of the earnings report. The company delivered what CEO Alex Karp described as an otherworldly quarter, with second-quarter revenue growing 93% year over year to $1.935 billion, the highest ever growth rate for the company, topping the $1.80 billion consensus and representing a 6.80% beat.

U.S. revenue grew 115% year over year to $1.573 billion, representing 81% of total revenue, with U.S. commercial revenue up 149% to $764 million and U.S. government revenue up 90% to $809 million. Adjusted EPS of $0.41 beat the $0.34-0.35 consensus by 17.14%. The company delivered a Rule of 40 score of 155, adjusted free cash flow of $1.22 billion at a 63% margin, adjusted operating income of $1.194 billion at a 62% margin, and GAAP net income of $1.062 billion at a 55% margin, with net dollar retention rising to 157%.

Palantir closed a record $2.132 billion in U.S. commercial total contract value bookings, up 153% year over year, on a dollar-weighted duration basis, with total TCV bookings of $3.4 billion, up 49%. The company closed 220 deals over $1 million, including 98 deals over $5 million and 73 deals over $10 million, ending the quarter with $13.1 billion in total remaining deal value and $4.9 billion in remaining performance obligations.

Guidance and Strategic Focus

Palantir raised full-year 2026 revenue guidance to $8.15 billion to $8.158 billion, representing 82% growth, well above the $7.77 billion Street estimate. U.S. commercial revenue guidance was raised to in excess of $3.424 billion, at least 134% growth, adjusted income from operations guidance was raised to $4.889 billion to $4.897 billion, and adjusted free cash flow guidance was raised to $4.5 billion to $4.7 billion. For the third quarter, the company guided revenue of $2.16 billion to $2.164 billion and adjusted income from operations of $1.292 billion to $1.296 billion.

Management emphasized a strategic focus on what it calls sovereign AI, enabling customers to own their data, weights, and AI infrastructure rather than depend on frontier labs, citing strong customer wins including $370 million and $37 million multi-year deals, growing Maven platform adoption in U.S. government with more than 25,000 builders, and CEO Alex Karp's goal to sustain U.S. commercial-level growth rates over the next 18 months.

Valuation Context

The report follows a roughly 40% drawdown from Palantir's November highs, driven by valuation concerns, short-seller Michael Burry's bearish accounting critiques, and worries about AI-agent competition from Anthropic and OpenAI. Some skeptics, including RBC Capital, have maintained that Palantir's valuation remains one of the richest in software even despite the strong results. Palantir's market capitalization stood at $288.50 billion at Monday's close, with a forward price-to-earnings ratio of 61.69 and a trailing P/E of 132.26. The stock's 52-week range spans $106.37 to $207.52.

Conclusion

Palantir's blowout quarter and sharply raised guidance appear to have overwhelmed the valuation concerns that had weighed on the stock since November. With the company continuing to post triple-digit U.S. commercial growth and management projecting sustained momentum over the next 18 months, the durability of today's pre-market surge will likely depend on whether the market's re-rating of the stock holds once regular trading begins.

This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research before making financial decisions.