Palantir Technologies
Q2 2026 (reported Aug 3) revenue was $1.935B, up 93% YoY and 19% QoQ, with US commercial up 149% to $764M and US government up 90% to $809M. The quarter closed 220 deals of at least $1M (73 above $10M), US commercial TCV hit a record $2.13B (+153%) and the Rule of 40 score reached 155% on a 62% adjusted operating margin and $1.06B of GAAP net income. FY2026 revenue guidance was raised to $8.150-8.158B (about 82% growth) and Q3 is guided to $2.16B, with results due in early November. On Sept 8 it named Nebius its preferred sovereign AI infrastructure partner, placing third-party compute and inference inside its own platform perimeter. The score holds at 9.1 because revenue exposure, moat and adoption maturity are already maxed at 10. The open risks are valuation, an estimated 50x+ 2026 guided revenue at early-September prices, and US government work at 42% of revenue.
Scenarios
A Rule of 40 score of 155% with a 62% adjusted operating margin at a roughly $7.7B revenue run-rate has no precedent in enterprise software. US commercial growth accelerated again to 149% and US commercial remaining deal value rose 124% to $6.24B, so contracted backlog supports further quarters of hypergrowth. The ontology plus forward-deployed engineering model creates deep switching costs, and the Nebius partnership extends the platform into sovereign compute without carrying the data-center capex itself.
At an estimated 50x+ 2026 guided revenue the stock prices in years of flawless execution. US government revenue is 42% of the total, so budget, procurement or political shifts hit hard. The base rate for sustaining 90%+ growth at multi-billion revenue scale beyond a few quarters is low, and frontier labs selling agents directly to enterprises and governments are the long-run substitution risk to the platform layer.
Key Factors to Watch
- ●Q2 2026 revenue $1.935B (+93% YoY), US commercial $764M (+149%), US government $809M (+90%)
- ●FY2026 revenue guide raised to $8.150-8.158B (about 82% growth); Q3 guide $2.160-2.164B, results early November
- ●220 deals of $1M+ (73 above $10M), record US commercial TCV $2.13B (+153%), US commercial RDV $6.24B (+124%)
- ●Rule of 40 at 155%, adjusted operating margin 62%, adjusted free cash flow $1.22B in the quarter
- ●Sept 8 Nebius partnership as preferred sovereign AI infrastructure partner, no financial terms disclosed
- ●Score maxed on are/md/aam (all 10) so beats confirm the ceiling, they cannot lift it
Score History
| Date | Score | Direction | Note |
|---|---|---|---|
| 2026-10-10 | 9.1 | Very Positive | W41 rotating refresh, HOLD 9.1. Text re-anchored on the Aug 3 Q2 2026 8-K ($1.935B revenue +93%, US commercial +149%, Rule of 40 155%, FY26 guide $8.15B) and the Sept 8 Nebius sovereign-AI partnership. Fixed stale Rule of 40 (145% was Q1), stale US commercial +133% and the misattributed 'otherworldly' quote; replaced unsourced 60x+ forward revenue with an estimated 50x+ 2026 guided revenue. Dims maxed, no gate candidate. |
| 2026-05-09 | 9.1 | Very Positive | W19 Q1 2026 BEAT — md 9→10 (Rule of 40 at 145%, 206 deals >$1M in one quarter — ontology moat irreplicable), dr 4→3 (Databricks/MSFT Fabric have not materialized as growth constraint) |
| 2026-03-08 | 8.6 | Very Positive | Score 8.8→8.6 (formula reweight: sb 0.25→0.15, are 0.20→0.25, md 0.20→0.25, dr 0.20→0.25, aam 0.15→0.10) |
| 2026-03-08 | 8.8 | Very Positive | Score 8.6→8.8 (md 8→9). External research cross-ref: $10B Army contract + ontology switching costs + 157 deals >$1M validate stronger moat |
| 2026-03-08 | 8.6 | Very Positive | Blind spot review: disruption_risk 2→4 (competition from Databricks/MSFT Fabric), moat_durability 9→8 (govt concentration risk) |
| 2026-03-08 | 9.2 | Very Positive | Initial assessment from batch 8 research |
Software Peers
Last researched: 2026-10-10
This is research and analysis, not financial advice. Scores reflect AI impact potential, not investment recommendations.