Palantir Q2 2026 Results Reveal a $200 Price Target — and a Valuation Test

Palantir’s Q2 2026 results landed on 3 August and immediately reframed the debate about whether the AI software group’s growth story had already peaked. Revenue hit $1.94 billion, up 93% year on year, comfortably clearing the $1.81 billion consensus forecast and prompting one investor to add to an existing position in his ISA at $149 per share.

Buying Into a 93% Revenue Jump

The headline number tells part of the story. US commercial revenue came in at $764 million, up 149% year on year. US government revenue reached $809 million, up 90%. Total US revenue for the quarter was $1.573 billion, up 115% year on year, according to the company’s 8-K filing.

Adjusted income from operations was $1.194 billion, up 157%, carrying a 63% cash-from-operations margin. GAAP income from operations reached $912 million, a 47% margin. GAAP net income attributable to common stockholders was $1.07 billion, representing a 55% net margin, compared with $327 million in the same quarter a year earlier. Both GAAP and adjusted diluted EPS came in at $0.41, up from $0.13 a year ago.

The Rule of 40 score, which combines revenue growth rate with operating margin, reached 155. That compares with a score of 145 in Q1 2026, which was itself already well above the threshold most software investors consider exceptional.

What the Palantir Q2 2026 Results Actually Show About Deal Momentum

Behind the revenue line, the contract data is where the Palantir Q2 2026 results add texture. Total contract value (TCV) closed in the quarter grew 49% year on year to $3.37 billion, per the company’s official Q2 Business Update. US commercial TCV alone reached $2.132 billion, and US commercial remaining deal value stood at $6.238 billion.

Palantir closed a record 220 deals of at least $1 million in the quarter, 98 deals of at least $5 million, and 73 deals of at least $10 million. (Yahoo Finance’s earnings-call summary cited 70 deals over $10 million; the primary company document puts it at 73, and that figure is used here.) Net dollar retention was 157%, meaning existing customers expanded their spending materially over the prior year. Adjusted gross margin held at 86%.

As CNBC reported, US commercial revenue has compounded by 380% since 2024. Chief executive Alex Karp told the network: ‘Forget consensus. To my knowledge, no businesses at our scale has even grown half this much.’

That backdrop matters for understanding why the investor bought in at $149. Palantir shares had lost 29% year to date before the results, on concerns that the AI software trade was losing momentum. The post-results move of about 15% in a single session reversed a meaningful portion of that drawdown.

Guidance Raised Again, But the Multiple Demands Respect

Full-year 2026 revenue guidance was raised to between $8.150 billion and $8.158 billion, representing approximately 80% growth year on year. That compares with prior guidance of $7.650 billion to $7.662 billion set after Q1. US commercial revenue guidance for the full year was raised to in excess of $3.424 billion, implying growth of at least 134%, up from prior guidance of in excess of $3.224 billion. Full-year adjusted free cash flow guidance was raised to between $4.5 billion and $4.7 billion, per Yahoo Finance’s earnings-call highlights.

As the Q2 shareholder letter puts it, the quarter marked ‘another record in our company’s two decades of operations’ with the business ‘nearly doubling in the span of twelve months.’

The investor’s price targets of $200 for 2026 and $250 for 2027 are broadly in line with current Wall Street consensus, where many firms cluster their targets in that same range. At $149, the forward price-to-earnings ratio using next year’s estimates was running at about 60 times earnings. That is a multiple that requires the growth cadence to remain intact. If commercial momentum stalls or a broader software de-rating resumes, the premium compresses quickly.

The three conditions underpinning the thesis are clear enough: continued top-line acceleration, sustained institutional demand for growth-oriented software names, and no sector-wide re-rating. All three are plausible given the trajectory, but none is guaranteed. The next test arrives at Q3 results, where the market will want to see whether the US commercial pipeline converts at a pace consistent with the raised full-year guidance of at least 134% growth.