Palantir Q2 2026: Revenue Up 93%, US Commercial 149%, Stock Soars 30% — Buy Now?

Andrew Nacin, Palantir’s CEO, called the results “other-worldly” and the results, in fact, support that claim. Revenue for the quarter of $1.93 billion showed a 93% increase year over year, a strong beat compared to the $1.81 billion analyst consensus, and a 19% increase over the previous quarter. 

Adjusted EPS of $0.41 more than doubled from the previous year and beat the average analyst consensus by $0.07. It was reported that the company had a 55% GAAP net margin and $1 billion in profits, a first in company history, as well as a 47% GAAP operating margin and 62% adjusted operating margin. 

Cash flow from operations was $1.2 billion and adjusted free cash flow was $1.22 billion, a 63% margin. The company achieved a Rule of 40 score of 155, easily on the growth and margin side. Software companies have a hard time even touching those numbers.

The headline in the headline was U.S. commercial. That segment grew 149% year over year and 28% sequentially, to $764 million. U.S. commercial total contract value hit $2.13 billion and the deal value climbed to $6.24 billion. Net dollar retention reached an all-time high of 157% with existing customers spending more than 50% of their previous year spend. U.S. government revenue grew 90% to $809 million. 

Overall U.S. revenue growth was 115% and now represents about 81% of overall company revenue. Deal momentum supported the trend. Palantir completed 220 million dollar plus contracts, 98 million dollar plus contracts, and 73 million dollar plus contracts, respectively. It is clear the company's AI platform AIP has transitioned from pilot to customer production spending, which is what bulls have been anticipating.

Palantir did more than meet expectations for the trailing quarter. It set the expectation for the rest of the year. Revenue for the third quarter is expected to be in the range of $2.160 - $2.164 billion with adjusted operating income of $1.292 - 1.296 billion. 

Management increased revenue expectations for the year to be in the range of $8.150 - $8.158 billion, indicating expected growth of about 82%. U.S. commercial revenue expectations rose above $3.424 billion, showing an expected growth of at least 134%. 

Adjusted operating income expectations were set at the range of $4.889 - $4.897 billion and adjusted free cash flow expectations were set at the range of $4.5 - $4.7 billion. The market expectations were adjusted this steeply this late in the year, convincing investors the commercial growth will be sustainable rather than a one-quarter spike.

Even before this report, Palantir was one of the most expensive stocks. The stock gained 30% after the report. There are three reasons for this. 

First, the revenue growth acceleration was definitive. Investors can price in a certain number of years of high growth. With the rapidly increasing revenue growth, it is rare to find a situation like that, and it extends the years of high growth. 

Second, Palantir was more aggressive than people expected to U.S. commercial growth of 134% beyond what Street modeled. Third, the trade was extremely crowded with skeptics. Michael Burry was holding a put position, arguing it was worth under $50. So when the earnings were blown out, it forced a quick covering of shorts that caused the extreme price movement. Analysts were quick to jump on this bandwagon. 

Citi changed their price target to $245 and Mizuho set their target to $215. It seems the market is rewarding demonstrated demand and punishing anything, as Palantir did, that meets the bar and is priced for perfection.

Despite all this, PLTR still isn’t a cheap stock. The company has hypergrowth predictions of 2026 with estimates of bringing in revenue with a P/S ratio of 50. The guidance increase threw more potential investors at the stock, pushing a nearly $45 billion lift to the company’s market value. That’s a whopping five times Palantir’s projections for all of 2026. 

PLTR Price Chart - Source: Tradingview

The bear case is that the predictions are priced for a flawless company, and a slowdown is going to be punished. The bull case has the numbers outrunning the skeptics with new demand for AI inputs. Thinking of the data in this way shows why the stock is so volatile.

Key Levels

• Resistance: $164.26 → $171.28 → $176.89 → $182.51
• Support: $153.94 → $147.42 → $141.94 → $131.26
• Breakout zone: $154 (former resistance, now the line to hold)
• Record high: $207.52 (Nov 3, 2025) — the true ceiling above these levels
• RSI: above 82, overbought after the surge

The quarter results absolutely blew expectations out of the water with unusually high guidance. Revenues grew by 93% and U.S. Commercial Revenues grew by 149%. Full-year targets were raised and many shorts were forced to buy into the rally resulting in a roughly 30% move in the stock.

Palantir stock is a buy if you’re ok with valuation risk. Considering it shots for 50 times forward sales, this stock prices in a few more years of hypergrowth. And it will crash if there is any indication of slowing growth. accelerating commercial adoption is helping the bulls, but bears are concerned with the valuation and the rising competition from OpenAI and Anthropic. For now, holding the $154 breakout zone is keeping the uptrend intact. This is just an analysis and not investment advice.

Palantir released a quarter that most software companies would envy with 93% growth and 62% adjusted margins, with a Rule of 40 at 155, and a raised outlook that set U.S. commercial growth above 134%. This week, AMD also released a beat and fell while Palantir also beat and rose. The large accelerations are hard to argue with and many traders were positioned incorrectly.

The company still has a valuation near 50 times forward sales, which means some level of perfection is required. As long as Palantir stays above the $154 breakout level, there is potential for Palantir to hit $170 to $177. Even higher, there is the potential for Palantir to reach a new record high at $207.52. Drop below $154 and there will be a significant drop in value.