Palantir Technologies is no longer being judged only by the size of its quarterly beat. After the company reported second-quarter 2026 results on Monday, attention quickly shifted to the scale of the business underneath: a record $3,373 billion in total contract value, a 155 percent Rule of 40 reading, and fresh evidence that both commercial and government demand are still expanding at pace.
The headline numbers were the kind that force a reset. Revenue rose 93 percent to $1.94 billion, comfortably ahead of the $1.81 billion consensus estimate and above the 41 cents in adjusted earnings per share that had also been forecast. For the full year, Palantir lifted its sales outlook from $7.65 billion to $7.66 billion to $8,150 billion to $8,158 billion, while third-quarter revenue guidance came in at $2.16 billion to $2.164 billion.
That operating momentum was visible across the customer base. US commercial revenue jumped 149 percent to $764 million, while US government sales increased 90 percent to $809 million. The company said it closed 220 deals worth at least $1 million during the quarter, including 98 above $5 million and 73 above $10 million. Its remaining US commercial backlog more than doubled to $6.24 billion, and the quarter’s total contract value reached $3,373 billion, including $2,132 billion in US enterprise business, up 153 percent from a year earlier.
Profitability kept pace as well. GAAP operating income reached $912 million, with a margin of 47 percent, while the adjusted operating margin came in at 62 percent. Palantir also reported a free-cash-flow margin of 63 percent, equal to $1.22 billion. The company said the balance between growth and profitability remained unusually strong, with the Rule of 40 at 155 percent.
Investors responded in force. Media reports said the shares rose by about 29.76 percent in one of their strongest daily gains on record after the earnings release. In German trading, the stock has gained 26.93 percent over the past seven days, though it ended the previous session at EUR 135.46, down 1.25 percent on the day. Even after the rally, the shares remain 24.74 percent below the 52-week high of EUR 179.98 reached in early November.
The reassessment on Wall Street was swift. Citi analyst Tyler Radke raised his price target to $245 from $200 and kept a buy rating, citing faster revenue growth, record US commercial metrics and stronger contract figures. Deutsche Bank upgraded the shares from hold to buy and left its target at $200, calling the quarter extraordinary. Other firms, including UBS, Goldman Sachs, Mizuho, Northland, DA Davidson, Truist and Piper Sandler, also lifted their targets, with the new levels spanning $200 to $230, or $200 to $220 in some reports.
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Chief executive Alex Karp called the quarter “otherworldly” and said demand for artificial intelligence-driven digital sovereignty was surging. In an interview, he said he expects the growth rate to continue for at least another 18 months.
Palantir also kept broadening its commercial footprint. Among the new and expanded deals disclosed were a $500 million extension of its partnership with Kirkland & Ellis and a $300 million framework agreement with the US Department of Agriculture. Separately, Poynter reported that USA Today Co. agreed on Wednesday to work with Palantir’s AI software to analyse reader data and automate monetisation.
There were also reminders that the story is not all one-way enthusiasm. Media reports based on regulatory filings said Karp and other directors sold more than $150 million of stock within 72 hours of the results, even as the shares were rallying. Cathie Wood’s ARK Invest was also trimming exposure, cutting its Palantir stake by about 109,000 shares worth roughly $17 million over recent trading days. Even after those sales, the position still amounted to about 3.11 million shares valued at around $493 million, making it one of the 10 largest holdings in the portfolio.
Outside the US, Palantir is running into more resistance. Reports said defence authorities in Switzerland and Germany rejected contract offers after risk reviews concluded that the company’s architecture could not technically rule out access by US intelligence services under the US CLOUD Act. For a group increasingly reliant on public-sector and defence work, those concerns add a geopolitical layer to the valuation debate.
Palantir next reports earnings on 2 November.
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