The U.S. government segment still brings in more revenue than the U.S. commercial business, though the commercial segment is growing faster. Still, a future change in administrations could hurt Palantir.
Even so, the backlog in its commercial business should be encouraging for its long-term growth, as U.S. commercial total contract value closed in the second quarter of 2026 was up 153% year over year to $2.13 billion. That represents a revenue stream that the company will cash in on over the next year.
Palantir's valuation is still a concern even over a longer time frame. If the company grew earnings per share by 50% annually over the next five years, an impressive accomplishment for any business, it would have $5.46 in earnings per share by 2030, which would give it a P/E ratio of 34. That assumes the stock doesn't grow, but that's still not a cheap valuation.
If Palantir executes, the stock should grow over the next five years. However, given its high valuation, 50% total growth seems like a fair estimate over the next five years.
Key drivers of Palantir's stock performance
Palantir's recent surge has been driven by the growth of its AI Platform and the need for businesses to accelerate traditional ways of doing business. Though the company's software can be secretive and not always easy to explain, it can also create huge efficiencies for businesses.
Using Palantir's software, Wendy's (WEN +1.41%), for example, was able to manage a supply chain issue in five minutes that would previously have taken 15 people a full day to fix. If Palantir can continue delivering those kinds of gains for its customers, the company should have a lot of growth ahead of it.
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