Palantir stock has struggled for months, but the company may have just given investors some hope again.
Shares of Palantir surged 29.45% on Aug. 4, the trading day after Palantir reported second-quarter results that topped Wall Street‘s expectations.
The company posted adjusted earnings of 41 cents a share, ahead of analysts’ estimates of 35 cents. Revenue jumped 93% year over year to $1.94 billion, beating expectations of $1.80 billion.
“Forget consensus,” Palantir’s CEO Alex Karp said in a CNBC interview. “To my knowledge, no businesses at our scale has even grown half this much.”
Karp has long been confident about Palantir’s growth, but investors haven’t always shared his optimism. Even after the recent 29% rally, the stock is still down 8.49% year-to-date, while the S&P 500 has rallied 13%.
Why Palantir is different from other software companies
One major concern for Palantir stock has been that enthusiasm for software companies could fade as AI threatens their growth and profitability.
Palantir’s latest results suggest that it hasn’t happened yet.
Revenue from Palantir’s U.S. government business rose 90% from a year ago to $809 million. The company is best known for selling software to the U.S. government and military, but its commercial business has been growing even faster.
Related: Palantir CEO escalates Microsoft’s AI warning
U.S. commercial revenue soared 149% year over year to $764 million and has increased 380% since 2024 on a compounded basis. The company now expects U.S. commercial revenue to exceed $3.42 billion in 2026, up from its previous forecast of $3.22 billion.
Palantir also raised its full-year revenue guidance to between $8.15 billion and $8.16 billion, up from its previous outlook of $7.65 billion to $7.66 billion.
Karp told CNBC that the strong growth “looks like this is going to go on for at least another 18 months.”
He also said during the latest earnings call that Palantir rejected the traditional Silicon Valley software model, which he described as one that locks customers into software. He said many AI companies use customer data to strengthen their own models, while Palantir lets customers keep control of their data, models, and intellectual property.
“We’re taking the AIP stack and extending it for sovereign AI, which requires us to be able to orchestrate and fine-tune models to provide a completely sovereign stack to our partners,” Karp said, adding that this approach is safer for clients.
Veteran analyst sends a bullish view on Palantir stock after earnings
Stephen Guilfoyle, a veteran analyst with more than 30 years of trading experience, was bullish on Palantir after its earnings report.
Guilfoyle is the founder and President of Sarge986 LLC, a family-run trading operation. He pointed to Palantir’s strong government and commercial growth, soaring profits, robust cash flow, and a “fortress-like” balance sheet.
Related: Cathie Wood sells $5.5 million of surging tech stock
“What’s not to like?” Guilfoyle wrote in a note published on TheStreet Pro. “The U.S. government business is hot. The U.S. commercial business is even hotter. Profits and margins are soaring. Cash flows are more than robust. The balance sheet is fortress-like.”
Guilfoyle noted that Palantir generated $1.22 billion in free cash flow during the quarter, up 114% from a year earlier. The company also ended the period with $9.4 billion in cash and no debt, giving it what Guilfoyle described as “one of the strongest balance sheets I have seen in almost 40 years on Wall Street.”
“I keep expecting someone to step up and compete effectively against Palantir in the data-driven, AI-focused, intelligence game, but so far, no one even comes close,” Guilfoyle added.
Guilfoyle maintained a $181 price target on Palantir shares. He said he would add more if shares pull back toward the 50-day moving average, while using the stock’s June low as his panic level.
Related: Giant satellite internet company files for Chapter 11 bankruptcy