Palantir Q2 Earnings: Can AI’s Hottest Stock Keep Its Record-Breaking Run Alive?

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Palantir Technologies is back in the spotlight today, set to report Q2 2025 results after the bell. The data analytics and artificial intelligence software firm, led by co-founder and CEO Alex Karp, has been one of the market’s darlings this year, surging 111% year-to-date to become the top-performing stock in the S&P 500. Investors have flocked to Palantir on the back of its artificial intelligence momentum, strong commercial expansion, and a reputation as a “pure play” AI leader. With its valuation now stretched to nosebleed levels, tonight’s print carries a high bar—and the risk of disappointment looms large if results fail to deliver another blowout.

The Street is looking for adjusted EPS of $0.14, up roughly 55% from last year, alongside revenue of $939 million, representing about 39% growth year-over-year. Management previously guided Q2 revenue to a range of $934 million to $938 million and forecast adjusted income from operations of $401 million to $405 million, implying margins around 43%. That means consensus already bakes in a small beat on revenue versus guidance—a sign of elevated expectations. Analysts at Loop Capital, Piper, and Wedbush remain bullish, citing strong momentum in Palantir’s Artificial Intelligence Platform (AIP) and U.S. commercial business. Citi, however, keeps a more cautious tone, noting potential softness in government contracts amid ongoing Department of Defense and HHS spending cutbacks.

The stakes are high given Q1’s performance. In the March quarter, Palantir delivered 39% revenue growth, powered by a 71% surge in U.S. commercial revenue that helped the company surpass a $1 billion annual run rate in that segment. Still, the stock wobbled post-report, slipping 12% after only narrowly beating EPS estimates by 1.1%, its smallest positive surprise in history. Shares quickly rebounded, but the episode underscored just how high the bar has been set for Palantir’s results.

Key drivers tonight will again center on the commercial side of the business. Citi checks suggest broad adoption of AIP, with strong ROI noted in industries like financial services. Loop Capital expects another revenue beat and a guidance raise, while Wedbush argues that Palantir could become the “next Oracle” over the next decade, with its AI moat supporting durable growth. The company’s deep ties with U.S. defense agencies remain a critical support, though this quarter investors will be watching closely to see whether recent government budget pressures weigh on results.

The company’s valuation will be another key talking point. At 93x forward sales and a market cap north of $360 billion, Palantir is trading at multiples rarely seen outside early-stage growth stocks. Analysts warn that even a strong beat may not be enough if guidance doesn’t push meaningfully higher. Citi notes that buy-side investors are looking for at least a 2.5 percentage point revenue beat and a more substantial full-year raise to keep momentum intact.

Looking forward, management has guided full-year 2025 revenue to between $3.89 billion and $3.90 billion, with adjusted income from operations expected between $1.71 billion and $1.72 billion. CFO Dave Glazer has pointed to strong profitability metrics, including adjusted operating margins above 40%, while CEO Alex Karp has remained bullish on the company’s positioning: “We are planning to win,” he told analysts in Q1.

Risks remain, especially around government contracts and international exposure. In Q1, international commercial revenue slipped 11% sequentially, raising concerns about growth outside the U.S. In addition, heavier investment in AI engineers and product development could pressure margins in the near term. Still, bulls argue that Palantir’s unique positioning in AI infrastructure—bridging government, defense, and enterprise—gives it scarcity value in a market eager for AI plays.

Bottom line: Palantir heads into Q2 earnings with a sky-high valuation and equally lofty expectations. Its U.S. commercial momentum and AIP adoption have been undeniable tailwinds, but investors will want to see continued top-line acceleration and a clear guidance raise to justify the rally. With shares up more than 100% year-to-date, tonight’s report will determine whether Palantir’s AI-fueled run has more fuel—or if the stock’s remarkable ascent pauses for a reset.

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