Executive summary
- Palantir delivered a Q2 2025 revenue beat: $1.004B, +48% YoY, and raised FY-2025 revenue guidance to $4.142–$4.150B; management cites accelerating AI demand across U.S. government and commercial customers (company Q2 Business Update, Aug 4, 2025). The focus keyphrase: is PLTR a buy after Q2 2025 AI revenue beat appears immediately because this report defines the question investors are asking. (investors.palantir.com)
- U.S. government momentum is structural: Palantir secured an Army Enterprise Agreement worth up to $10 billion over 10 years, consolidating multiple contracts — a material long-term addressable market boost for government software spend (U.S. Army announcement; Reuters coverage, Jul–Aug 2025).
- Profitability and operating leverage improved: Q2 GAAP net income $326.7M, GAAP EPS $0.13, and GAAP operating margin 27%; adjusted operating income margin was 46%, delivering a Rule-of-40 of 94%. Those metrics validate scalable economics if revenue growth persists (Palantir Q2 slides, Aug 3–4, 2025). (investors.palantir.com)
- Valuation and price risk: shares already reflect a high-growth premium — implied market value has expanded rapidly (price and shares outstanding indicate a market-cap multiple in the hundreds of billions), increasing sensitivity to any softening in commercial adoption or profit guidance (SEC filing and price feeds). (SEC)
- Verdict: is PLTR a buy after Q2 2025 AI revenue beat? — conditional yes for investors who (a) accept concentration in government contracts, (b) believe commercial AI demand will scale, and (c) can tolerate high valuation volatility; require confirmations on sustained commercial expansion and margin durability.
Summary fundamentals
- Q2 2025 revenue: $1,003.7M (rounded $1.004B), +48% YoY, +14% QoQ (Palantir Q2 2025 Business Update, Aug 4, 2025). (investors.palantir.com)
- U.S. revenue: U.S. revenue grew 68% YoY to $733M (company slides). (investors.palantir.com)
- Q2 2025 GAAP net income: $326.7M; GAAP EPS: $0.13 (Palantir Q2 slides). (investors.palantir.com)
- Adjusted operating income (Q2): $464M, margin 46%; GAAP operating margin 27% (Palantir slides). (investors.palantir.com)
- Debt / liquidity: Palantir’s balance sheet (Q2 filings) shows operating cash and liquidity consistent with growth investments; shareholders should review latest 10-Q for exact cash and contractual obligations (Palantir Form 10-Q, July 28, 2025). (SEC)
- Market capitalization snapshot: shares outstanding ~2.37B total (Class A + Class B) as of July 28, 2025; multiply by current share price to derive market cap (SEC Form 10-Q; Reuters price feed). Use the live price to compute market cap at time of check. (SEC)
Detailed fundamental analysis
Revenue composition and trends
Palantir’s Q2 2025 revenue acceleration to $1.004B was driven by both U.S. government contracts (+49% YoY for government revenue) and commercial growth (U.S. commercial revenue +93% YoY to $306M) (Palantir Q2 slides). The firm separates strategic commercial contracts from recurring commercial revenue; excluding strategic contracts, total revenue still grew ~49% YoY, indicating underlying demand beyond a handful of large deals (Palantir Q2 2025 Business Update). (investors.palantir.com)
The company raised its Q3 outlook to roughly +50% YoY and lifted FY-2025 guidance to +45% YoY, signaling management confidence in demand visibility, particularly in U.S. commercial and government segments (Palantir press release, Aug 4, 2025). (SEC)
Margin drivers and operating leverage
Palantir reported adjusted operating income $464M (46% margin) in Q2 2025, reflecting strong operating leverage as revenue scales while product-engineering and deployment costs are amortized (Palantir slides). GAAP operating margin of 27% and improving net income show that the business is translating growth into profit — a key differentiator versus many adjacent AI/software peers (Palantir Q2 materials). Investors must monitor whether margins persist as the company invests to scale commercial operations and international deployments. (investors.palantir.com)
Balance sheet and capital allocation
Palantir’s SEC filings show large share counts and governance notes (2.27B Class A + 97M Class B outstanding as of July 28, 2025), and the company has historically prioritized strategic investments and FDE (Forward Deployed Engineer) deployments to win contracts (Form 10-Q). That structure supports scale but implies capital needs for international expansion; cash flow generation in 2025 improved materially but watch free cash flow conversion and any sizable M&A/contract financing that could alter the capital mix (SEC filing). (SEC)
Valuation multiples
Post-Q2 re-rating pushed Palantir’s market valuation materially higher. Use the SEC shares outstanding and the current share price (Reuters real-time quote) to compute market capitalization and derive forward multiples based on FY-2025 guidance of ~$4.14B revenue and consensus estimates for operating earnings (Reuters price feed; Palantir guidance). Given rapid re-rating, forward P/E and EV/Revenue metrics will be sensitive to any miss vs raised guidance. (SEC)
Momentum & technical snapshot
(Technical feeds polled Sep 26–27, 2025)
- RSI (14): ~51.9 — neutral momentum on daily timeframe (Investing.com technicals). (Investing.com)
- MACD status: MACD slightly positive versus signal on daily charts in several technical providers (TradingView gauge / TipRanks snapshot indicate buy-leaning shorter-term technicals). (TradingView)
- 50-day & 200-day SMA: 50-day ≈ 165–166, 200-day ≈ 118–120; price trading above the 200-day and near or slightly above the 50-day on many feeds — trend remains upward across medium term (TipRanks, TradingView). (TipRanks)
- 1-month return vs Nasdaq: PLTR has materially outperformed Nasdaq YTD; 1-month return is positive and shows elevated relative strength versus major indices (Investing.com historicals). (Investing.com)
- Average daily dollar volume (3-month): average share volume ~69–72M (3-month average), at current price represents substantial dollar volumes and institutional tradability (Investing.com / YCharts average-volume snapshots). (Investing.com)
Interpretation: technicals indicate the stock is in a bullish medium-term trend but susceptible to high-volume intraday swings; use technical triggers to manage entry risk.
Peer comparison
Selected public peers in enterprise AI/analytics and data platforms: Snowflake (SNOW) and Splunk (SPLK) (others include C3.ai; choice reflects enterprise software peers that monetize data/AI).
| Ticker | Recent revenue growth | Gross margin | Debt/equity (approx.) | Forward P/E (consensus) |
|---|---|---|---|---|
| PLTR | Q2 2025 +48% YoY (Q2 revenue $1.004B). (investors.palantir.com) | High software gross margin profile on adjusted basis; adjusted gross profit margins reported strong in Q2 slides. (investors.palantir.com) | Low net financial leverage historically; check 10-Q for current. citeturn7search2 | High forward multiple after re-rating; sensitive to guidance. citeturn6search11 |
| SNOW | Product revenue +32% YoY in Q2 FY26 (~Aug 27, 2025). (snowflake.com) | Gross margins in cloud software mid-70s to 80s (company metrics). | Low leverage typical for cloud software. | Forward multiples elevated but below Palantir’s peak; check consensus. |
| SPLK | Recent quarters show software/observability revenue growth and improved margins post-acquisition (company releases). | Gross/profit margins below pure cloud peers due to product mix and legacy license. | Moderate leverage due to M&A history (company filings). | Forward P/E lower than high-growth AI pure plays; greater FCF focus. |
Takeaway: Palantir’s growth rate and margin expansion place it in a premium bracket vs traditional enterprise software peers; valuation must be viewed through the lens of unique government contracting scale + accelerating commercial AI revenue.
Latest earnings highlights & management guidance
- Q2 2025 revenue: $1.004B, +48% YoY (Palantir press release and Q2 Business Update, Aug 4, 2025). (investors.palantir.com)
- GAAP net income: $326.7M; GAAP EPS: $0.13 (Q2 slide appendix). (investors.palantir.com)
- Adjusted operating income: $464M (46% margin); Rule of 40 94% (Q2 slides). (investors.palantir.com)
- Guidance: FY-2025 revenue guidance raised to $4.142–$4.150B; Q3 revenue guide ~+50% YoY (press release). (SEC)
(Management excerpt ≤25 words) — “We continue to invest aggressively in AIP and the U.S. while driving operating leverage at scale.” (Palantir Q2 Business Update, Aug 4, 2025). (investors.palantir.com)
Strategic moves, catalysts & risks (from filings and news)
Key catalysts
- $10B U.S. Army Enterprise Agreement: consolidates 75 contracts into a single vehicle over 10 years; increases addressable government spend and shortens procurement cycles (U.S. Army announcement; Reuters, Jul 31–Aug 1, 2025).
- Acceleration of U.S. commercial AIP adoption: U.S. commercial revenue doubled YoY and shows rapid customer additions and larger deal sizes, which is central to management’s growth thesis (Palantir Q2 slides). (investors.palantir.com)
Principal risks
- Customer concentration and timing: while large government enterprise agreements expand TAM, they can be lumpy and non-binding for full ceiling value; revenue realization depends on exercised orders (Reuters, Army announcement; Palantir slides). (Reuters)
- Valuation and downside sensitivity: the surge in share price increases downside if commercial adoption or margins disappoint; multiple compression risk is material. (Market commentary, FT/Investopedia). (Financial Times)
- Regulatory and reputational risk: government contracts expose Palantir to political/regulatory scrutiny; NGOs and media coverage on government use cases can influence perception and procurement (press coverage). (The Guardian)
Valuation & scenario analysis
Assumptions and method: use FY-2025 guidance midpoint ($4.146B) and reported adjusted operating income for scenario construction; apply conservative/base/optimistic earnings conversion and multiple ranges.
- Conservative case: revenue growth slows, management guidance not achieved; assume FY revenue $3.5B, adjusted operating margin 20% → adjusted operating income $700M; apply EV/EBIT 12x → implied EV ≈ $8.4B → implied equity value materially below current market cap → price target: materially lower (risk case). (Scenario logic; guidance and margin references). (SEC)
- Base case: company hits FY-2025 guidance $4.146B with adjusted operating margin 40% (near Q2 run-rate), adjusted operating income ≈ $1.66B; apply EV/EBIT 20x (premium for growth + defense moats) → EV ≈ $33.2B → price consistent with mid-range market valuations (implies moderate upside if the market assigns this multiple). (Guidance; adjusted margin from Q2). (investors.palantir.com)
- Optimistic case: continued AI and government monetization accelerate revenue to $6.0B with sustained adjusted margins 45% → adjusted operating income $2.7B; apply EV/EBIT 25x → EV ≈ $67.5B → implies significant upside but requires flawless execution and durable margins. (Bull case). (investors.palantir.com)
Clear point: valuation swings widely based on margin realization and revenue conversion of large contract ceilings. Assign probabilities and size positions accordingly.
Trading checklist & signals
Momentum trader (short-term)
- Entry trigger: daily close above $185 with 1.5× average 30-day volume and MACD > signal on daily chart (confirm on TradingView). (TradingView)
- Stop-loss: 6–8% below entry or below 50-day SMA if price closes beneath the SMA. (TipRanks)
- Targets & exits: scale at 15% and 30% gains; tighten stops if RSI(14) > 70 or if contradictory news (e.g., contract cancellations).
Long-term investor (fundamental)
- Must-have checks before adding material exposure: (1) two consecutive quarters of sustained commercial growth >50% YoY excluding strategic one-offs; (2) adjusted operating margin stability above 30%; (3) clear visibility on realization of Army/DoD enterprise agreement revenue (order book visibility in 10-Q/10-K). (Palantir guidance and filings). (investors.palantir.com)
- Position sizing: start small (1–3% of portfolio) and scale only if the above conditions persist and no adverse regulatory or reputational headlines emerge.
