In a sea of companies reporting mixed financial results this quarter, Palantir stands out. Although Palantir was not immune to the AI jitters that caused industry-wide drops in share prices earlier this year, the AI and analytics company reported that its overall revenue grew ۹۳% year over year to $۱.۹۴bn. That’s well over the $۱.۸bn Wall Street expected Palantir to bring in for the second quarter.
The glowing financials sparked a ۱۰% surge in share prices in the immediate aftermath. Despite growing opposition to Palantir’s work with various governments including the crucial role the company plays in the Trump administration’s immigration agenda, Palantir’s revenue from US government contracts grew ۹۰% year over year to $۸۰۹m.
“This quarter was otherworldly: our US commercial revenue grew ۱۴۹% year-over-year, our overall revenue grew ۹۳% year-over-year,” Palantir’s CEO Alex Karp said.
The company expects that growth to continue over the next two quarters and said they expect to bring in $۲.۱۶۰bn to $۲.۱۶۴bn in the third quarter and raised their expectations for full year revenue to between $۸.۱۵۰bn and $۸.۱۵۸bn. The company previously said it expected to bring in between $۷.۶۵bn and $۷.۶۶bn in ۲۰۲۶.
But analysts remain unsure of whether Palantir can maintain that level of growth, or whether AI could replace some functionalities of its various software offerings.
Emarketer analyst Jacob Bourne said there was strong evidence existing customers are committed to Palantir and that the company has “been the clearest counter-example to the claim that enterprise AI doesn’t scale past pilots, and accelerating growth makes that harder to argue with”.
“What it doesn’t settle is whether AI eventually collapses the software layer Palantir occupies, which has weighed on its stock price this year,” Bourne said in a statement.
In his letter to shareholders and in interviews ahead of the earnings call, Karp took aim at the creators of large language models like OpenAI and Anthropic that use a token system to provide access to its AI.
He wrote that Palantir’s partners and customers want to maintain “control over data” and not hand the keys to all their proprietary information over to the large language labs which meed to ingest as much data as possible to train their models. Karp suggested that was part of why customers are choosing Palantir over other companies.
“The models have grown and thrived by essentially ingesting the entire written work product of our civilization,” Karp wrote in his letter.
“We have always declined, and will continue to decline, entering into a parasitic relationship with our partners,” Karp said.
