Palantir (PLTR 2.43%) has given shareholders plenty to celebrate once again.
The high-flying data analytics company blew away expectations for the second quarter. Its revenue growth accelerated, this time coming in at 48%, topping the $1 billion mark for the first time. That was well ahead of the analyst consensus at $939.5 million.
U.S. revenue growth was exceptionally strong at 68%, reaching $733 million as both the federal government and private sector embrace Palantir's artificial intelligence (AI) platform. The company also closed $2.27 billion in total contract value, up 140%, showing that there's a long runway of growth ahead.
Operating income surged as well, up 156% year over year to $269 million, on a generally accepted accounting principles (GAAP) basis, and adjusted earnings per share (EPS) rose to $0.16, ahead of estimates at $0.14.
The already pricey stock rose 7.8% on Aug. 5, showing the company was able to top a high bar.
Image source: Getty Images.
How Palantir compares to the competition
Palantir has been on an incredible hot streak as the artificial intelligence (AI) stock was the top performer in the S&P 500 last year. It's the best performer year to date too, up 133% as of this writing.
Its market cap has risen to nearly $420 billion, making it one of the 20 most valuable companies in the U.S.
With $1.004 billion of revenue last quarter, Palantir needed about 22 years to reach the billion-dollar milestone. Here's how its path compares with some of the market's other big winners -- the Magnificent Seven.
| Company | Time to Reach $1 billion in Quarterly Revenue |
Market Cap at Time of Milestone |
|---|---|---|
| Palantir | 22 years | $323.3 billion |
| Tesla | 12 years | $19.0 billion |
| Meta Platforms | 8 years | N/A |
| Alphabet | 6 years | $52.8 billion |
| Amazon | 7 years | $4.0 billion |
| Microsoft | 18 years | $24.8 billion |
| Apple | 11 years | $4.1 billion |
| Nvidia | 14 years | $19.7 billion |
Source: Ycharts.
Looking at the chart above, you'll notice two things about Palantir. First, it took the company longer from its founding to reach $1 billion in revenue than any other company on the list.
That's not necessarily a problem. Some of these businesses scaled faster than others for a unique reason. Alphabet, then Google, struck gold with its search engine, as did Meta with Facebook. Amazon, meanwhile, was able to scale its e-commerce business quickly.
Palantir, on the other hand, has evolved significantly since its founding in 2003 when the company got its start helping intelligence agencies connect the dots hidden in its data. More recently, the company has rapidly evolved thanks to the launch of its Artificial Intelligence Platform (AIP) in 2023, which has substantially accelerated its revenue growth.
What's more concerning is the market cap attached to Palantir as the stock was much more expensive than any of the Magnificent Seven were when they crossed the $1 billion milestone. In fact, with a price-to-sales ratio over 130, Palantir is much more expensive than any other stock in the S&P 500 (based on that metric).
What it means for Palantir
After the latest report, there's little doubt Palantir's business continues to fire on all cylinders. The Trump administration has also embraced its platform to help revamp the government, boost ICE deportations, and improve efficiency, and U.S. businesses are following suit.
The company also raised its full-year guidance again, calling for revenue of $4.146 billion and $1.916 billion in adjusted operating income (both figures at the midpoint of their respective ranges).
Given the surge in bookings, Palantir appears to be in good shape for at least the next few quarters. However, its valuation will eventually hamper further gains for the stock.
