Palantir Lifts Outlook After Otherworldly' Commercial Sales

Palantir now expects $4.89 billion to $4.91 billion in adjusted income from operations this year, up from $4.45 billion at the top end of the range previously. The software developer and major military vendor projected as much as $8.16 billion in sales, above estimates of roughly $7.7 billion on average.

Palantir Chief Executive Officer Alex Karp said US commercial sales in the second quarter were "staggering," rising 149% from a year earlier to $764 million, well above the average analyst estimate of $716.4 million.

The stronger outlook worked to assuage investors' fears that Palantir's business would suffer from AI developers such as Anthropic PBC selling their own software and from governments outside of the US increasingly working with tech firms at home. Karp hit back at the fear of AI upstarts replacing his business in a letter to investors on Monday, pointing to the risks of "letting the models loose within their homes."

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Palantir's shares rose as much as 15% in late trading to $144.65. They had closed at $125.65 on Monday. If the gains hold in regular trading on Tuesday, the company will notch its biggest intraday gain in more than a year.

"This quarter was otherworldly," Karp said in prepared remarks. "Such an achievement would be cause for astonishment in any business; for one of our size, scale, and consequence, it is simply staggering."

Palantir gained fame as a stealthy Silicon Valley startup selling customized data analysis software to the US government and allied military forces. Karp, Chief Technology Officer Shyam Sankar and other company leaders have increasingly cultivated a pro-America image since US President Donald Trump took office, publishing books on the need for tech to re-engage with the defense industrial base and speaking at conferences on the role of AI in war.

The company has more than doubled its market value since late 2024 to roughly $300 billion.

Palantir's US government sales remain strong, but European leaders have signaled their desire to reduce reliance on US tech companies and do more business with firms at home. In recent months, officials in both France and the UK have moved to end deals with Palantir.

"Sometimes we make decisions that are against our economic interests, like we're supporting lots of institutions in Europe," Karp said in a call with analysts Monday. "The growth sucks."

Palantir's sales abroad grew 33% from a year earlier to $362.5 million. US revenue meanwhile rose 115% to $1.57 billion.

Palantir's adjusted gross margin was 86% in the last quarter, down slightly from the three months prior, after the company took on cloud hosting for a government customer, Chief Financial Officer Dave Glazer said on the analyst call. He cautioned that expenses will ramp up in the third quarter, in part because of the seasonality of new hires and other product and marketing efforts.

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In both his letter to investors and on the call with analysts, Karp characterized Palantir's software as an alternative to working directly with the AI companies that make large language models, systems trained on vast amounts of text and other content.

He praised Palantir customers for declining to become "vassal states of the language labs" and pitched his company as one that will "allow you to switch out models."