Booming demand for Palantir's AI solutions is restoring confidence in the company

Palantir closed over $2 billion in U.S. commercial contract value in the second quarter, marking a 153% jump from the prior-year period.

Palantir CEO Alex Karp called the company's second-quarter results "anomalously strong" earlier this week - and Wall Street seems to agree.

Shares of Palantir (PLTR) were up 10% in Friday trading, putting the stock on track to post a 39% weekly gain. That would be the stock's best weekly performance since November 2024, according to Dow Jones Market Data. That previous record was also the result of a postearnings surge, after the company showed monetization of its Artificial Intelligence Platform.

This time, the strength of Palantir's U.S. commercial business was on full display in the company's financial results. The U.S. commercial segment has become its biggest growth driver, increasing 149% from a year ago.

The company has emphasized the importance of sovereign AI, pushing to give organizations autonomy over their data and models.

It's a position that has put Palantir at odds with leading AI labs, whom Karp has characterized as looking to "colonize" their customers by ingesting their business intelligence and proprietary data. But it looks to be resonating with the company's customers, who use its platform to connect disparate data sources and deploy AI models over their core operations.

Palantir closed over $2 billion of U.S. commercial total contract value in the second quarter, a 153% jump relative to a year before.

Palantir's strong performance has bolstered Wall Street's confidence in the company. Lauded as an AI darling in 2025, its stock had a rough start to 2026 as it was swept up in the broader software selloff earlier this year. Shares were down as much as 40% on the year as of late June. Today, they are close to breaking even for the year.

The narrative surrounding Palantir is shifting from "AI loser" to "AI winner," William Blair analyst Louie DiPalma wrote in a Tuesday note.

"The stellar performance defies concerns that competition with Anthropic and OpenAI is intensifying for enterprise AI workflows," DiPalma said of Palantir's earnings beat.

Following the earnings report, Deutsche Bank analyst Brad Zelnick upgraded his rating on the stock to buy from hold, pointing to the company's exceptional ability to provide valuable AI applications to customers at a time when many legacy software giants are still scrambling to transition their businesses.

"Importantly, the quarter showcased Palantir's sovereign-AI capabilities, which we believe are increasingly resonating as customers realize that AI value generation is not simply about consuming more tokens, but about converting those tokens into governed, measurable outcomes," Zelnick wrote in a Tuesday note.

-Christine Ji