‘This quarter was otherworldly’: Palantir earnings surge past expectations

Shares soar as yearly revenue up 93%, even as opposition grows to company’s role in Trump immigration agenda

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 93% year over year to $1.94bn. That’s well over the $1.8bn Wall Street expected Palantir to bring in for the second quarter.

The glowing financials sparked a 10% 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, the company’s revenue from US government contracts grew 90% year over year to $809m.

“This quarter was otherworldly: our US commercial revenue grew 149% year-over-year, our overall revenue grew 93% year-over-year,” Palantir’s CEO, Alex Karp, said.

The company expects that growth to continue over the next two quarters and said it expects to bring in $2.160bn-$2.164bn in the third quarter and raised its expectations for full-year revenue to between $8.150bn and $8.158bn. The company previously said it expected to bring in between $7.65bn and $7.66bn in 2026.

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 that existing customers were committed to Palantir and that the company had “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 such as 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 need to ingest as much data as possible to train their models. Karp suggested that was part of why customers were choosing Palantir over other companies.

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“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 added.