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Palantir Technologies (NYSE:PLTR) extended its leadership in artificial intelligence infrastructure after delivering another blockbuster quarter that exceeded expectations and reinforced confidence in its long-term growth trajectory. With surging enterprise demand and a deepening moat in government contracts, Wall Street sentiment continues to turn more favorable, prompting Piper Sandler this week to raise its price target to $201 from $182 while maintaining an Overweight rating.
Revenue for the second quarter reached $1.03 billion, marking the company’s first billion-dollar quarter and a 48% year-over-year increase. U.S. commercial sales soared 93%, outpacing every other software peer and signaling strong enterprise adoption of Palantir’s Artificial Intelligence Platform (AIP). Customer count climbed 43% to 849, while average spending per client rose 28%, reflecting the firm’s ability to expand across departments once its software is deployed.
Profitability remains one of Palantir’s defining strengths. Operating margins improved to 26.8%, and GAAP profit margin hit 22.1%, while free cash flow reached $1.27 billion, representing a robust 57% FCF margin. With $6 billion in cash and virtually no long-term debt, the company maintains one of the cleanest balance sheets in the software sector. Management raised its full-year revenue outlook to $4.16–$4.18 billion, up from previous guidance of $3.9 billion, citing faster-than-expected AI adoption in both public and private markets.
CEO Alex Karp highlighted during the Q2 earnings call that “Palantir’s AIP has moved beyond experimentation—enterprises are now embedding our platform into critical decision-making systems.” The company’s expanding partnerships with defense, healthcare, and industrial clients underscore this trend. In May, Palantir announced a strategic collaboration with SAP to integrate ontology-based AI tools into SAP’s enterprise resource systems—a move analysts say could significantly widen Palantir’s total addressable market.
The company’s long-standing relationships with U.S. and European governments continue to provide stability and recurring cash flow. Government revenue rose 53% year-over-year, while the commercial division accounted for the bulk of new deal activity. Palantir secured 157 new contracts worth at least $1 million, and its net dollar retention rate remained strong at 128%, underscoring sticky customer relationships and cross-platform scalability.
From a valuation standpoint, Palantir trades near $181 per share with a market cap of $429 billion and a forward P/E ratio of 217×. While that multiple remains steep, bulls argue the company’s unique position in operational AI—bridging defense, industrial, and corporate ecosystems—justifies a premium. Piper Sandler’s revised $201 target reflects its confidence in continued revenue acceleration through 2026, driven by commercial expansion and rising federal AI demand.
Technically, Palantir maintains a solid uptrend. The stock trades well above its 50-day moving average of $171.70 and its 200-day average of $124.60. Support sits near $175, with resistance at $190—a breakout level that could open a path toward the $200–$210 zone. Trading volume remains elevated, and the stock’s beta of 2.6 suggests continued volatility as investors react to high growth expectations.
Palantir’s challenge remains sustaining its momentum at scale. Analysts note that maintaining a 30%+ revenue CAGR while preserving profitability will be key to defending its valuation. However, the company’s proven ability to convert pilot programs into recurring contracts, its growing dominance in AI infrastructure, and its expanding use cases across industries position it as one of the few tech firms capable of bridging government-grade security with enterprise-scale AI.
With accelerating growth, expanding margins, and a clear runway of adoption, Palantir’s fundamentals continue to justify its market optimism. As Piper Sandler noted, “Palantir’s operational AI lead and execution remain unmatched in the enterprise software space.” For long-term investors, the stock remains one of the most compelling pure plays on the rise of applied AI.
That’s TradingNEWS