Shares rocketed past $154 on May 29, extending a two-day rally of roughly 16% that has drawn Wall Street's attention back to one of the most expensive stocks in software. No new announcement triggered today's move; instead, bullish momentum for the broader market and defense industry news are helping support gains , layered atop an earnings report that left the fundamentals hard to argue with — even if the price tag remains debatable.
An Earnings Beat That Broke Records
Palantir's revenue grew about 85% in the quarter — the fastest increase in sales since at least 2020, when the company went public.
Earnings-per-share hit $0.33, beating estimates of $0.28.
Net income roughly quadrupled to $870.5 million from $214 million a year earlier. For shareholders, those numbers confirm the company is converting its government AI work and fast-growing commercial business into real, expanding profits — not just revenue growth.
The Commercial Business Silenced the Skeptics
$595 million in U.S. commercial revenue — growing at 130% year-over-year — has ended the debate over whether Palantir is merely a government contractor. Palantir finished the quarter with 615 U.S. commercial customers, a 42% increase from a year ago. That widening customer base matters because it diversifies revenue away from lumpy government contract cycles. Management guided Q2 revenue to $1.8 billion — above the $1.68 billion consensus — and sees $7.65–$7.66 billion for full-year 2026, an annual jump of 71%.
A Fortress Balance Sheet Funds the Bet
Palantir ended the quarter with $8.0 billion in cash and U.S. Treasury securities and no debt.
Adjusted operating income reached $984 million — a 60% margin — while adjusted free cash flow hit $925 million, a 57% margin. That cash pile gives management room to invest aggressively without diluting shareholders through borrowing.
The Valuation Question Won't Go Away Even after a 20%-plus year-to-date decline from its November 2025 all-time high, Palantir trades at roughly 42 times forward sales — versus Datadog in the mid-50s and CrowdStrike in the mid-70s on a forward earnings basis.
Market capitalization now sits near $344 billion. The math demands that Palantir sustain near-triple-digit growth for years. At 112 times 2026 earnings, multiples like that tend to end one of two ways: the company grows into them, or the market eventually forces a reckoning. Today's rally rewards believers, but it also raises the stakes for every quarter ahead.