Shares of Palantir (PLTR 6.60%) are flying on Tuesday, up 8.7% as of 10:05 a.m. ET. The jump comes as the S&P 500 gained 0.1% and the Nasdaq Composite rose 0.3%.

Palantir reported another blowout quarter, handily beating Wall Street's already high expectations for the artificial intelligence (AI) powerhouse.

Palantir sales top $1 billion for the first time

Palantir's Q2 earnings showed the company is continuing to fire on all cylinders and delivered, for the first time ever, sales of over $1 billion. The company reported adjusted earnings per share (EPS) of $0.16 on $1 billion in sales versus the consensus $0.14 per share on $940 million in sales.

CEO Alex Karp praised his company's performance and spoke of his vision for the future, calling it an "efficient revolution" and saying that his "goal is to get 10x revenue and have 3,600 people. We now have 4,100 [people]."

Military personnel in a command center.

Image source: Getty Images.

The company also lifted its guidance for the full year from between $3.89 billion and $3.9 billion to between $4.142 billion and $4.15 billion.

Why Palantir stock's valuation still looks risky

The company's incredible and efficient growth is undeniable, but I continue to have serious doubts about its long-term prospects. Its trailing price-to-earnings ratio (P/E) is nearly 700, an astronomical figure. Its forward P/E is nearly 280. Tesla -- which I also think is severely overpriced -- is the only other top-20 stock that trades with a forward P/E over 100.

The company would have to achieve near perfection for many years to justify this sort of multiple. I'm not sure it can, despite the optimism of its CEO. I would stay away from Palantir stock.