Palantir Shares Surge After Record AI Revenue Growth

Palantir Technologies reported second-quarter 2026 revenue of $1.94 billion, a 93% year-over-year increase that significantly exceeded Wall Street expectations. The growth was primarily driven by a 149% surge in U.S. commercial revenue to $764 million and a 90% increase in U.S. government revenue to $809 million. Net income more than tripled to $1.06 billion, and the company achieved a Rule of 40 score of 155%.

CEO Alex Karp attributed the results to an "otherworldly" demand for AI sovereignty, arguing that enterprises are choosing Palantir to maintain control over their proprietary data rather than relying on frontier model providers like OpenAI and Anthropic. The company closed 220 deals worth at least $1 million, with 73 contracts exceeding $10 million. Consequently, Palantir raised its full-year 2026 revenue guidance to between $8.15 billion and $8.16 billion.

Following the announcement, shares rallied between 27% and 40% over the following week, causing approximately $3 billion in paper losses for short sellers. While analysts at Deutsche Bank upgraded the stock to a buy, Jefferies maintained an underperform rating, citing concerns over valuation and international growth. In Europe and the U.K., the company continues to face political scrutiny over data handling contracts with the National Health Service and the London police.