Palantir Stock Soars as AI Demand Drives Strong Guidance

By Valerie Njee

Palantir’s recent stock surge is powered by a potent mix of AI momentum, strong earnings, and bullish guidance—but there’s more nuance behind the numbers than just hype. Let’s break it down:

Key Drivers Behind Palantir’s Stock Momentum

1. Blowout Q2 Earnings

  • Revenue growth: Up 48% year-over-year, beating Wall Street’s 39% estimate.
  • Adjusted EPS: Surged 78%, well above analyst expectations.
  • U.S. commercial revenue: Skyrocketed 93%, driven by demand for AI-powered platforms like Foundry and Gotham.

2. Raised Full-Year Guidance

  • Palantir lifted its 2025 revenue forecast to $4.14–$4.15 billion, up from $3.89–$3.9 billion.
  • Analysts now expect 2026 revenue to hit $5.61 billion, with EPS climbing to $0.85.

3. AI Platform Demand

  • CEO Alex Karp emphasized the “astonishing impact of AI leverage” across sectors like defense, healthcare, and finance.
  • Palantir’s AI tools are increasingly embedded in government contracts, including potential roles in the Trump administration’s $175B missile defense initiative.

4. Strategic Positioning

  • Palantir’s Forward-Deployed Engineer model—embedding experts with clients—has drawn praise from Salesforce’s CEO for its premium pricing and deep integration.
  • Major banks like Morgan Stanley and Bank of America raised their price targets.

4 February 2025: Dan Ives (Wedbush Securities) discussing Palantir forecast

Valuation Watch

Palantir’s valuation is sky-high:

  • Forward P/E: Over 240x, making it one of the most expensive stocks on the market.
  • Some analysts warn that years of growth are already priced in, which could limit upside unless growth accelerates beyond projections.

What to Watch Next

  • Q3 earnings (due Nov 3): Forecasted EPS of $0.17 and revenue of $1.09B.
  • Technical levels: Support zones at $148, $125, and $98; upside target projected at $201.30 if momentum continues.

Forecasted Financials

PeriodEPS (USD)Revenue (USD)
Q3 20250.171.09B
Q4 20250.191.19B
FY 20250.644.16B
FY 20260.855.61B

Palantir’s growth trajectory is impressive, with EPS expected to jump 31% in 2026 and revenue climbing nearly 35% year-over-year.

Bullish Long-Term Views

  • Some analysts project Palantir could reach $600+ by 2027 and $1,000+ by 2029, assuming sustained 50% annual growth and global AI adoption.
  • Daniel Ives (Wedbush) maintains an “Outperform” rating with a $200 target, citing Palantir’s dominance in AI deployment across defense and commercial sectors.