'Skeptics disarmed': Palantir revenue exceeds $1 billion for the first time Will it reach the peak?

One of the major players in the artificial intelligence market, Palantir, beat Wall Street's expectations for last quarter's revenue: it exceeded $1 billion for the first time in the company's history. Palantir also raised its full-year forecast. Shares of the defense contractor and military AI developer were up more than 5% in the postmarket following the report's release. Palantir "continues to outperform expectations," analysts said, but are not yet rushing to advise its securities to buy.

Military AI developer Palantir's revenue in the second quarter (ended June 30) rose 48% to exceed $1 billion for the first time, the company reported. The company beat analysts' forecasts by a solid $940 million, according to LSEG, reported CNBC. That said, Wall Street didn't expect the company to break the $1 billion mark until the fourth quarter at the earliest, the channel added.

Adjusted earnings per share amounted to $0.16 against the forecasted $0.14. Net income increased by 144% to approximately $326.7 mln.

Palantir expects revenue growth to continue from the current quarter: it will be in the range of $1.083 billion to $1.087 billion, the company said, while analysts had expected only $983 million. Palantir also raised its full-year forecast - to a range of $4.142 billion to $4.15 billion instead of $3.89 billion to $3.9 billion. Analysts surveyed by FactSet had expected total sales for the year of $3.89 billion, writes The Wall Street Journal.

"The pace of growth in our business has accelerated dramatically - after years of investment on our part and derision from some observers," CEO Alex Karp wrote in a letter to shareholders. - The skeptics, it must be admitted, are now far fewer: they are disarmed and, in a sense, forced to accept it."

Palantir shares jumped 5.3% to $169 in the postmarket after the reports were released. Prior to that, the military AI developer's stock added 4.1% in Monday's main trading, strengthening to $160.66, its highest closing price. 

Palantir's shares have more than doubled in value since the beginning of the year: investors are betting on its AI tools and government contracts, CNBC explains. At the same time, the company's market capitalization has exceeded $379 billion: Palantir has entered the top 20 most expensive companies in the United States, surpassing Salesforce, IBM and Cisco and becoming one of the 10 largest technology companies in America by market value.

According to FactSet, Palantir's securities are highly overvalued: they are traded with a forward P/E ratio (ratio of current share price to expected annual profit) of 276. Among other companies in the top 20 by capitalization, only Tesla has a three-digit P/E - 177, CNBC writes.

Palantir's U.S. revenue grew 68% year-on-year to $733 million, with commercial revenue (excluding military orders) in the U.S. nearly doubling to $306 million.

The company received an additional boost thanks to President Donald Trump's campaign to increase government efficiency, which included staff cuts and government orders. Palantir's revenue from U.S. government orders grew by 53% to $426 million, CNBC emphasizes.

In the second quarter, Palantir awarded 66 contracts valued at $5 million or more and 42 contracts valued at $10 million or more. Total contract value increased 140% year-over-year to $2.27 billion.

Palantir's strong U.S. commercial business results are an important indicator of robust demand, especially for the company's AI products, according to a note by Third Bridge analyst Jordan Berger, which is cited by Bloomberg.

"We continue to hear from experts that Palantir maintains a unique position in the artificial intelligence technology monetization market despite the general noise, oversaturation and hype in the industry, and the company's Q2 2025 results only confirm this assessment," Berger wrote.

"They [Palantir] have growth drivers on both sides - in both the commercial and government segments," quoted by Reuters as D.A. Davidson analyst Gil Luria. - As for the public sector, their technology has advanced to the point where the company can act as the lead contractor on projects of increasing scale. The only way to describe their [growth] trajectory is a parabola." 

Last month, Wedbush confirmed a $160 target on Palantir shares. "We believe Wall Street is underestimating Palantir's revenue potential from its U.S. commerce business based on its artificial intelligence platform (AIP). It could exceed $1 billion in the coming years," the analysts wrote at the time. The investment bank noted that a powerful driver for the growth of the company's shares will be a $10 billion contract with the Pentagon, which has become the largest in Palantir's history and provides for ten-year supplies of AI software and tools.

Wall Street is wary of Palantir shares, with a MarketWatch consensus price target of $115.5, down 28% from Monday's closing price. Of the 29 analysts tracking the military AI developer's stock, 17 recommend holding the stock in a portfolio (Hold), eight advise buying (Buy and Overweight) and four advise selling (Sell).

This article was AI-translated and verified by a human editor