Palantir 2Q25 Earnings Preview: What to Expect from this Meme Stock?

TradingKey - Palantir will release its earnings for the second quarter of the fiscal 2025 on August 4th after the market closes:

· 2Q25 Earnings per share: $0.14 estimate vs. 2Q24 actual of $0.09 (+55% y/y)

· 2Q25 Revenue: $939.33mn estimate vs. 2Q24 actual of $678.13mn (+39% y/y)

Once again, Palantir is rallying in 2025. After April meltdown, the stock went up 115% and now it is facing a major test with the Q2 earnings. So, what shall we pay attention to?

Palantir business can be divided into two parts based on the customers – government and commercial business, both facing rather different dynamics:

Government: US Government business is expected to grow around 40% year-over-year mostly due to upselling to ongoing customers such as Department of Defense. Here the risk comes from potential budget cuts from the current administration, as well as government-led initiatives related to AI.

Commercial: In Q1, the US commercial business performed solidly with 70% top-line growth, partially due to 40% increase in total customers. The expectations remain very high, however we would like to hear Alex Karp talk more about competition, as we see companies like Meta, OpenAI, Oracle and Microsoft are making significant progress in AI, and these companies are much larger in scale with deeper pockets.

Something that the market overlooks is also the bad performance of the overseas business. Currently, the non-American revenue is around 30% from the total, but in Q1 it registered negative growth of 10%. This may further drag down the total revenue jeopardizing the bullish investment sentiment.

With nearly 40x P/S ratio, Palantir valuation has reached stratospheric levels. There is a lot of pressure on them to deliver, not just revenue and EPS beats but also in terms of expectations for the next quarter.   

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