US commercial revenue surged 149% as Palantir raised guidance to $8.15B, yet the stock trades at 109x forward earnings – a valuation that continues to divide analysts.
Palantir reported Q2 2026 revenue of $1.935 billion, a 93% year-over-year increase and the fastest growth rate in the company’s history. Adjusted EPS of $0.41 beat the $0.35 consensus by 17%. Shares jumped roughly 15.5% to around $145 following the earnings release.
US commercial revenue hit $764 million, up 149% year over year and 28% sequentially, according to Palantir’s Q2 press release. US government revenue reached $809 million, a 90% increase. The combined US segment grew 115% year over year and now accounts for more than 81% of total revenue.
GAAP operating income came in at $912 million, a 47% margin. Adjusted free cash flow hit $1.22 billion at a 63% margin. The company’s Rule of 40 score reached 155%, a metric that combines revenue growth with profit margin and is typically considered healthy above 40%.
The deal pipeline reinforced the top-line momentum. Palantir closed 220 contracts worth at least $1 million during the quarter. Seventy-three of those exceeded $10 million. Remaining US commercial deal value climbed to $6.238 billion, a 124% year-over-year increase, according to the company’s earnings filing.
CEO Alex Karp described the results as “otherworldly” during the earnings call, crediting surging enterprise demand for AI sovereignty. “This revolution has taken off, and you can’t put it back in the bag,” Karp told analysts.
A year ago, government contracts dominated Palantir’s revenue base. Now US commercial has nearly closed the gap at $764 million versus $809 million for the government. It is growing at almost twice the rate. That transition from a defense-dependent contractor to a dual-engine AI platform is the core of the bull thesis. Q2 delivered the most convincing evidence yet that the shift is structural rather than episodic.
The valuation objection that weighed on Palantir before earnings became even harder to dismiss after the post-earnings rally. At roughly $145 per share, the stock trades at approximately 109 times forward earnings and 61 times trailing sales, according to Tickeron’s analysis. Few enterprise software companies have sustained a price-to-sales ratio above 30 times over extended periods. Deutsche Bank upgraded Palantir from Hold to Buy while maintaining its $200 price target, citing continued momentum across both its commercial and government businesses, according to The Street. Analyst price targets remain widely divided, ranging from RBC Capital’s $90 bear case to Oppenheimer’s $200 bull target, a gap wide enough to illustrate how polarized the valuation debate remains.
The $148 bull scenario rested on a decisive beat-and-raise. Palantir delivered exactly that. Management lifted full-year 2026 revenue guidance to $8.15 billion, implying 82% growth. It raised US commercial guidance above $3.424 billion at 134%-plus growth. The $108 bear case hinged on the idea that even strong results would fail to justify the multiple. That argument was not disproved; it was deferred. The stock popped on the print, yet at $145 it remains roughly 30% below its November 2025 peak, despite nine consecutive earnings beats.
The $6.2 billion in remaining US commercial deal value provides a visible growth runway. Converting backlog to recognized revenue at the current pace is the operational question for the back half of 2026. Internationally, the UK’s ongoing scrutiny of Palantir’s NHS contract, which prompted a formal review earlier this year, remains a live overhang on the international segment.
Q3 guided revenue of approximately $2.16 billion would represent continued sequential acceleration. For more on Palantir, visit its PLTR stock page.
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