Tech and defence firm smashes expectations with AI-driven growth surge
Palantir Technologies has stunned Wall Street with its latest financial results, reporting its first-ever billion-dollar revenue quarter and sending shares soaring over 4% in after-hours trading on Monday.
“The growth rate of our business has accelerated radically. Yet we see no reason to pause, to relent, here,” said CEO Alex Karp following the release of the company’s second-quarter earnings.
The US-based defence and data analytics firm continues to ride the wave of artificial intelligence innovation, significantly outperforming analyst expectations across the board.
Palantir’s breakthrough quarter, driven by soaring US commercial and government contracts, cements the company’s place at the forefront of AI-integrated defence technology.
Key Earnings Highlights
- Earnings per share reached $0.16 — surpassing forecasts of $0.14 — and marked a 77% year-on-year increase.
- Quarterly revenue stood at $1.004 billion — up 48% from the same period last year and beating the $939.25 million projection.
- US commercial revenue grew an impressive 93% year over year to $306 million.
- US government revenue hit $426 million, marking a 53% increase.
These figures reflect the company’s aggressive expansion and successful integration of AI capabilities into its core software offerings.
From May’s Dip to August’s Surge
Just a few months ago, Palantir shares took a 12% tumble after Q1 results, despite strong revenue. Investors at the time were uneasy about slowing international commercial growth and the company’s valuation. But Monday’s results appear to have shifted the narrative.
Raised Outlook for 2025
Palantir is now forecasting full-year 2025 revenue between $4.14 billion and $4.15 billion — well above Wall Street’s previous estimate of $3.91 billion. The firm also reported $2.27 billion in total contract value for the quarter, a 140% increase year over year.
The AI Advantage
Karp credited Palantir’s growth to its early adoption and integration of advanced artificial intelligence technologies.
“It has been a steep and upward climb — an ascent that is a reflection of the remarkable confluence of the arrival of language models, the chips necessary to power them, and our software infrastructure,” Karp wrote in a shareholder letter.
“One that allows organizations to tether the power of artificial intelligence to objects and relationships in the real world.”
He added: “For a startup, even one only a thousandth of our size, this growth rate would be striking… For a business of our scale, however, it is, we continue to believe, nearly without precedent or comparison.”
“This was a phenomenal quarter… We are guiding to the highest sequential quarterly revenue growth in our company’s history,” Karp concluded.
US Army Deal Worth Up to $10 Billion
Adding further momentum, Palantir recently revealed it had secured a major US Army contract — a deal potentially worth $10 billion over the next decade.
Wedbush analyst Dan Ives called the agreement “one of the largest ever DOD software contracts in US history.”
“Palantir remains one of our top tech names to own in 2025, and this deal represents another opportunity for PLTR to capitalize on while continuing to generate unprecedented traction for its entire portfolio across the federal and commercial landscapes,” Ives noted in a post-earnings briefing.
Eye-Watering Valuation Still a Concern
Despite stellar growth, some analysts remain wary of Palantir’s sky-high valuation. Shares currently trade at 24 times the historical market multiple of the S&P 500 — a level that has raised eyebrows.
“We cannot rationalise why Palantir is the most expensive name in our software coverage. Absent a substantial beat-and-raise quarter elevating the [near term] growth trajectory, valuation seems unsustainable,” wrote RBC Capital Markets analyst Rishi Jaluria, in a note issued before the earnings release.
Palantir appears to have delivered exactly that.
With shares up more than 110% this year, compared to the S&P 500’s 7.4% rise, Palantir is firmly back in the spotlight. Its blend of cutting-edge AI technology, government contracts, and bold revenue forecasts is turning heads on Wall Street — for better or worse.
As the company charges forward, investors will be watching closely to see whether Palantir can keep up this pace — or if this quarter was simply a high-altitude anomaly.
