Palantir (PLTR) Raises Guidance, Nears Microsoft Margin

Palantir Technologies raised its full-year outlook after a second quarter that blew past analyst estimates, pushing the stock higher and putting the company within striking distance of Microsoft's industry-leading software margins.

Adjusted earnings came in at $0.41 a share, well above the $0.34 consensus. Revenue jumped 93% from a year earlier to $1.94 billion, with U.S. revenue surging 115%. Analysts had modeled $1.81 billion.

The company closed 220 deals worth at least $1 million during the quarter, including 98 valued at $5 million or more and 73 worth at least $10 million. That pace of large deal flow suggests the AI boom is translating into real contracts, not just hype.

"Demand for AI sovereignty has now been unleashed," CEO Alex Karp said in a statement. "And Palantir is the only company that has demonstrated it can transform tokens into actual economic value."

For the full year, Palantir now expects revenue of $8.15 billion to $8.16 billion, up from prior guidance of $7.65 billion to $7.66 billion. The new range sits above the $7.73 billion analysts had expected. The raise signals confidence that the deal pipeline will keep expanding.

Seeking Alpha analyst Julian Lin said the company is now within striking distance of overtaking Microsoft as the unofficial world's most profitable software company by margin. Palantir's operating margin has been climbing as revenue scales faster than costs. Microsoft's Azure and commercial cloud segments have long set the benchmark for profitability in enterprise software. Palantir's margins are now close enough that a few more quarters of 90%-plus revenue growth could tip the comparison.

Palantir's Alpha Score of 37 out of 100, labeled Mixed, reflects a technical and fundamental picture that has been uncertain. The earnings beat may shift that view. Investors can track the stock's score and price action on its PLTR stock page.

AI Capex Debate: Google's Take

As Palantir accelerates, the broader debate over AI spending continued. Google DeepMind Chief Strategy Officer Jasjeet Sekhon said the heavy capital expenditure by hyperscalers is laying the foundation for AI's next phase, known as recursive self-improvement, or RSI. The concept describes AI systems capable of automatically creating improved versions of themselves. It has gained traction in recent weeks as technology companies increasingly discuss the path to artificial general intelligence.

Sekhon acknowledged that current AI revenues "don't sustain the capital expenditures we're making so far." But he argued that betting against the industry's long-term direction "would appear to be unwise." As he put it: "Steam engines were used to create the next steam engine."

The comments come as investors question whether the massive spending on data centers and chips will eventually pay off. Google's Alpha Score of 78, labeled Strong, reflects its strong position in the AI race. Its stock was up 4.88% on the session to $373.51. The Google stock page is GOOGL stock page.

Microsoft, which competes with both Palantir and Google in enterprise AI, saw its stock rise 4.93% to $487.65. Its Alpha Score of 71, labeled Moderate, suggests a solid but not exceptional setup. The Microsoft stock page is MSFT stock page.

Trump Hits Oil Majors on Profits

In a separate development, President Donald Trump criticized Exxon Mobil and Chevron for their soaring profits, saying the two largest U.S. oil companies are "making too much money" and urging them to "give some of that back to the public" by lowering gasoline prices.

"I don't like it... I'll say it loud and clear. I'm not happy about it," Trump told reporters three days after the companies reported blowout second-quarter earnings. Earlier Monday, Trump also took aim at Chevron CEO Mike Wirth for not crediting his administration's efforts to support the oil industry during Wirth's weekend appearance on Fox News.

The oil price comments add a layer of political risk for energy stocks, which have been rallying on supply concerns. The broader market, however, focused on the tech earnings. Stock index futures rose, with Nasdaq 100 futures getting a lift from Palantir's report.

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Palantir's next catalyst is the third-quarter earnings report, due in early November. The raised guidance sets a high bar, but the deal pipeline shows no signs of slowing. If the company can sustain its 90%-plus revenue growth rate, the margin milestone with Microsoft may come sooner than expected.