Palantir earnings split Wall Street as shares surge on record Q2 results
Analysts remain divided on valuation despite 93% revenue growth and strong margin expansion, with RBC and Jefferies maintaining underperform ratings while consensus leans moderate buy.
Palantir Technologies delivered record financial results for the second quarter of 2026, reporting a 93 per cent year-on-year surge in revenue to $1.935 billion. The company posted its first-ever quarterly net income exceeding $1 billion, reaching $1.062 billion, which surpassed consensus estimates of $0.34 per diluted share. Following the release, Palantir’s shares jumped nearly 15 per cent in after-hours trading, closing around $144.45, following a previous close of $125.65.
Management raised full-year revenue guidance to at least $8.15 billion, an increase of nearly $500 million from previous forecasts. The company highlighted exceptional profitability metrics, achieving a record "Rule of 40" score of 155 per cent. Adjusted free cash flow margins stood at 63 per cent, with the firm ending the quarter with $9.2 billion in cash, cash equivalents, and short-term U.S. Treasury securities.
U.S. commercial revenue was a primary driver of growth, skyrocketing 149 per cent year-on-year to $764 million. Total U.S. revenue grew 115 per cent to $1.573 billion. In contrast, international revenue grew only 26 per cent year-on-year, lagging behind domestic performance and drawing scrutiny from some market observers regarding the sustainability of global expansion.
Wall Street analysts remain divided on the stock’s trajectory. RBC Capital Markets maintained an 'Underperform' rating with a $90 price target, citing concerns over high valuation multiples and rising competition. Jefferies also kept an 'Underperform' rating, raising its price target to $80 but warning that the current valuation leaves little room for error.
Conversely, Morgan Stanley adopted an 'Equal-Weight' rating with a $205 price target, citing consistent revenue acceleration and margin expansion. The consensus analyst rating stands at a 'Moderate Buy', with a mean price target of $194.07. The broader S&P 500 Information Technology Index serves as a benchmark, though Palantir’s performance in the sovereign AI and defence tech sectors has significantly outpaced traditional software peers.
