Palantir Hits $1B Quarter But Can It Keep Up the Pace?

Palantir just hit a billion dollars in quarterly revenue… and I’m still not sure the market gets what’s about to happen.

I’m Rick Orford. I’ve been trading since ‘99, and no, I’m not a financial advisor. Which is good, because I’m not here to sell you a 401(k) plan or pitch some ETF you don’t need. I break down numbers so retail investors like us can make smarter, faster decisions.

So here’s the deal:

Palantir’s commercial business has grown 93% in the U.S., surpassing even my targets.

They just inked a $10 billion Army contract.

And they’ve just posted a 94% Rule of 40 score, which means they’re scaling like a startup but printing like a blue-chip company.

But I’m watching one specific signal that almost nobody’s talking about, and it could be the key to unlocking another $5–10 billion in growth over the next few years.

In this video, I’ll show you exactly where that signal is hiding and why it could turn Palantir from a defence darling into an enterprise juggernaut.

Palantir’s Background

All right, many of you already know who Palantir is – and if you do, you can skip this. But if you don’t, Palantri is an AI company that offers big data analytics, helping organisations integrate, analyse, and act on large and complex data sets. Currently, they’re one of the biggest defence contractors in the US, and most of their revenue comes from government contracts, though Palantir has a fast-growing commercial segment, and you’re about to find out just how fast. 

Q2 Report

First, Palantir’s Q2 2025 financials have been released, and to no one’s surprise, they blew expectations out of the water. 

Quarterly revenue is up 48% year over year, reaching $1 billion for the first time ever, beating Q1 guidance by 7%, analyst estimates by a massive 62.50%, and my own prediction by 60%. 

Breaking it down by segment, overall commercial revenue grew 47%, while government revenue went up 49%. 

Now, let’s take a look at the US numbers, because let’s face it, the US is where Palantir’s biggest clients are. Total US revenue came in at $733 million, or a 68% increase year over year. 

Government revenue went up 49% to $426 million, and commercial revenue did great, increasing 93% – beating my expectation of at least 60% growth – to $306 million. This is an excellent improvement from an already impressive 71% year-on-year growth rate reported last y  ear.  

The US commercial customer count also grew 64% year over year, and though it’s not explicitly stated in the filings, I suspect the company’s efforts in expanding its AIP boot camp are a big part of this growth. 

For Q2, total contract value reached $2.3 billion, which is up 140% year over year. Again, this is a new record for the company. 

And finally, Palantir reported a 13-cent diluted EPS, a 117% increase from last year’s 6 cents. 

Palantir also reported $6 billion in cash, cash equivalents, and marketable securities, representing a roughly 15% growth from year-end values in 2024.

Guidance

Due to its Q2 growth, Palantir has increased its year-end guidance from $3.902 billion on the high end to between $4.142 and $4.150 billion, or around 6%. 

They also increased the expected annual US commercial revenue growth to at least 85% or over $1.3 billion. 

Rule of 40

Their Q2 financials also highlighted Palantir’s Rule of 40 score. 

For those unfamiliar, the Rule of 40 is a financial performance benchmark for companies that offer software and software as a service, or SaaS. It adds the company’s year-over-year revenue growth rate and profit margin, and if it scores above 40%, then it’s growing at a decent pace and is considered financially healthy. 

And to no one’s surprise, the company now has a high 94% score, calculated from a 48% revenue growth and 46% profit margin, which means it’s growing exceptionally well while maintaining solid profitability. 

For full disclosure, though, the company uses figures on an adjusted basis for this. If we use GAAP values, then it’s 48% revenue plus 27% margin, or 75% total. It’s lower, yes, but no less impressive. 

 $10 billion Army Contract

Next, let’s talk about another huge win for Palantir. 

On July 31, 2025, Palantir scored a massive fixed-price, $10 billion contract with the US Army. And this isn’t just a regular deal; it’s an enterprise-wide agreement, which means the Army is simplifying and consolidating all existing contracts where Palantir is already working, whether directly or as a subcontractor. That $10 billion is spread out over the next 10 years, ending in July 2035. 

This deal cements Palantir as a key long-term player in U.S. military intelligence and tech. If you’re bullish on Palantir or, better yet, you already have shares, this is big, big news. 

Performance Rundown

Now with that explosive Q2 report and recent contract win, let’s zoom out and review Palantir’s price performance. By the way, I’ll be using Barchart for this section. If you want to follow along, just scan this QR code. 

So, Palantir is up 112% year to date and an impressive 549% in the last 52 weeks. It’s also up by a massive 1,521% over the past three years. 

On August 4, it reached an all-time high at $161.40 and closed at $160.66. But the good news doesn’t stop there. 

Palantir is already trading above $168 after hours, or nearly 5% more. 

The stock price is now accelerating towards the $178 high target price set by analysts. 

Tailwinds

But is that really Palantir’s limit? Let’s review what’s working for the company. 

US Commercial Revenue Growth

So, as I mentioned in my pre-earnings video, Palantir is making significant strides in expanding its commercial AIP products through strategic partnerships with companies like Accenture, Amazon, Google, Microsoft, and many more. 

These alliances aren’t just branding exercises. They’re helping Palantir integrate its platform into real enterprise workflows at scale. That kind of embedded adoption could turn AIP into the default infrastructure for operational AI across multiple industries.

European Markets

Palantir still hasn’t breached European AI markets the same way it has in the US. This topic was brought up on my Discord channel recently.

So, if you’re more positive about the company’s prospects, you can view Europe’s slow AI adoption as a potential growth catalyst for the future. If Palantir cracks the European enterprise market with AIP the same way it did with U.S. clients, that could be a multi-billion-dollar unlock.

So instead of seeing Europe as a dead zone, some long-term investors view it as optionality a lever that hasn’t been pulled yet.

Beneficiary of the Current US Administration

Lastly, and this is undeniable, Palantir is the clear winner in the United States’ efforts to modernise and adopt AI across its national operations. Contracts like the Golden Dome and Maven present new potential revenue streams for Palantir, but more importantly, they further entrench the company within the defence and intelligence ecosystem.

Headwinds

But of course, it’s never good to be too optimistic about anything. Palantir is indeed facing some challenges, so let’s go through the biggest ones. 

Valuation Risk

As of the previous close, Palantir is trading at 432 times its forward earnings, meaning investors are paying more than 400 times what the company is expected to earn over the next 12 months. That’s huge. 

To put that into perspective, let’s look at two companies: Nvidia, the most valuable and currently the only $4-trillion company in the world, and Microsoft, which is getting really close to the big 4T. I recently discussed both companies, and you can check out these videos. 

Anyway, Microsoft is trading at 35 times forward earnings, while Nvidia is at 44. 

That means Palantir is trading at ten to twelve times more than the two most valuable companies in the world. 

Now, I always say that P/E valuations don’t necessarily apply to hyper-growth companies.  

However, as I also outlined before, Palantir’s valuations have been high for quite some time now, and at these levels, meeting expectations may not be enough. The company may have to beat estimates by wide margins and raise guidance every quarter to keep its stock price up. And if growth slows even slightly, the stock could face a sharp correction. 

Tight EU Regulations

I mentioned Palantir’s EU prospects earlier in a positive light, but now, let’s consider the other side of the coin. 

EU AI restrictions are far tighter than those of the US, and that could be a serious headwind for Palantir. The EU AI Act, which was officially approved in 2024 and begins phasing in over the next two years, introduces strict rules around transparency, data privacy, algorithmic accountability, and the classification of “high-risk” AI systems. Given Palantir’s involvement in defense, surveillance, and predictive analytics, its software could be subject to more intense regulatory barriers in Europe than in the US. 

Verdict

So, overall, I’m still bullish on Palantir based on its excellent Q2 growth and recent contract win, and I’m excited for what the company has in store for the future. I wouldn’t be surprised if the stock hits $190 in the near term on the strength of this recent good news alone. 

However, I will be doubling my monitoring efforts moving forward to see whether its overall momentum can keep pace with investor expectations. 

So what’s your take on Palantir? Do you think the AI wave and government backing are enough to justify the hype, or are we nearing the top? 

Let me know your thoughts in the comments. And if you found this video helpful, make sure to like, subscribe, and turn on notifications so you never miss an update.