Palantir Technologies will release its second-quarter earnings on Monday, Aug. 4. Ahead of its earnings, the AI-powered software company reached an all-time high price of $160.39 on July 25, reflecting widespread investor optimism as it headed into Q2 results. PLTR is up 109% year-to-date, significantly outpacing the broader S&P 500 Index.

This explosive rally has pushed Palantir’s 14-day Relative Strength Index (RSI) to 65.30, just below the 70 threshold that typically signals overbought conditions. While some investors might see this as a warning sign, the market seems undeterred. The momentum behind Palantir remains strong, with buyers continuing to push the stock higher even as valuation metrics soar to dizzying heights.

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Palantir is currently trading at eye-popping valuation levels, with a forward earnings multiple of 433.88x and a price-sales ratio of 130.8x. These numbers are significantly higher than those of major tech giants, including Nvidia. Such a rich premium indicates that the market isn’t just expecting strong results, it’s effectively pricing in continued acceleration in growth.

However, any earnings miss or signs of a moderation in growth could challenge this narrative and trigger volatility.

The options market is already reflecting some of this volatility. Traders are pricing in a potential move of about 10.48% in either direction following the earnings release. While that’s below Palantir’s average earnings move of 17.47% over the past four quarters, it still indicates potential for significant post-earnings volatility.

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Palantir Gears Up for a Strong Q2: Can It Beat Expectations Again?

Palantir is heading into its second-quarter earnings with strong momentum. The company’s management has guided Q2 revenue between $934 million and $938 million, representing roughly 38% year-over-year growth at the midpoint. However, based on its recent performance trends and growing demand for its Artificial Intelligence Platform (AIP), there’s reason to believe Palantir might once again exceed its projections.

Over the past year, Palantir has shown consistent acceleration in its revenue growth. In Q1 2024, year-over-year growth stood at 21%, but by Q1 2025, it had climbed to an impressive 39%. Much of this momentum is being driven by surging demand for its AI-powered solutions, particularly in the U.S. market.

The company’s U.S. operations are thriving across both commercial and government sectors. In Q1, U.S. revenue jumped 55% compared to the previous year, with the commercial segment standing out with 71% year-over-year growth. That builds on a 64% gain in U.S. commercial revenue the quarter before, highlighting sustained demand for Palantir’s AI offerings.

Palantir’s U.S. commercial business has now surpassed a $1 billion annual run rate, driven by new customer wins and deepening engagement with existing clients. The total contract value (TCV) booked in this segment reached $810 million in Q1, up 183% from a year earlier. This number could once again mark solid growth in Q2.

Over the trailing 12 months, Palantir has secured over $2 billion in U.S. commercial TCV. Furthermore, the remaining deal value in this business increased 127% year-over-year, indicating a robust pipeline that will support future growth.

Customer growth also remains solid. Palantir now serves 432 U.S. commercial clients, representing a 65% increase from the same quarter last year, and has doubled the number of million-dollar deals compared to the same period a year ago.

The U.S. government business, too, will remain a major contributor in Q2. Notably, in Q1, revenue from this segment rose 45% to $373 million, reflecting continued success in securing and expanding AI-related government contracts.

While top-line growth is strong, Palantir is also gaining ground on the bottom line. The company’s operating leverage is improving, with adjusted operating margins reaching 44% in Q1, an 800-basis-point increase from the prior year. That strength is expected to continue into Q2, helping to drive further earnings growth.

Analysts are forecasting PLTR to deliver earnings per share (EPS) of $0.08 for the second quarter, a significant increase from $0.03 a year ago.

With its expanding commercial footprint, deepening government relationships, and surging demand for AI solutions, Palantir appears well-positioned for another quarter of strong performance.

Is Palantir Stock a Buy?

Palantir heads into its Q2 earnings report with strong momentum, particularly in its U.S. commercial and government segments, and growing demand for its AI platform. The company has shown a clear trend of accelerating revenue growth and improving profitability, setting the stage for potentially strong Q2 results.

Despite the solid momentum in Palantir’s business, Wall Street remains cautious ahead of Q2 earnings. The consensus rating on the stock is “Hold,” primarily due to its steep valuation. Palantir may be delivering the growth, but at current prices, it’s already priced to perfection.