Palantir Q2 Earnings Preview: Profit Growth Expected as Wall Street Sets $200 Price Target

TradingKey - Palantir ( PLTR) is scheduled to release its second-quarter 2026 financial results after the U.S. market close on August 3. Following a significant pullback in its valuation so far this year, this earnings report is seen as a key test of whether the company's fundamentals remain robust.

According to FactSet data, the market currently expects Palantir's second-quarter revenue to be $1.81 billion, with adjusted earnings per share of $0.34. However, as AI demand from the U.S. government and enterprises continues to be unleashed, several Wall Street firms believe this forecast may still be conservative.

Oppenheimer expects Palantir's second-quarter revenue growth rate could reach approximately 85% year-on-year, and continues to maintain a price target of $200 for the company. Citi ( C) also set its price target at $200, believing that the U.S. commercial and government businesses are expected to re-accelerate, driven by AI demand.

Optimism has already begun to be reflected in the stock price. On July 27, Palantir's share price rose about 7% in a single day to reclaim $131, indicating that some capital is positioning itself ahead of the earnings release.

US Business Remains Palantir’s Growth Core

Palantir's rapid growth over the past two years has been largely driven by sustained increases in AI spending from US government and enterprise customers, a trend that has yet to show any significant signs of slowing down.

Analysts generally expect that the US government business will remain the largest source of growth in the second quarter. As US homeland security, defense, and various military departments continue to expand their AI budgets, demand for Palantir's Gotham platform remains robust.

Meanwhile, the US commercial business also maintains strong expansion. As more and more enterprises begin to deploy generative AI applications, Palantir's AIP (Artificial Intelligence Platform) and Foundry platform are becoming critical infrastructure for large enterprises to build AI systems.

In its latest research report, Citi pointed out that the company's commercial growth had briefly slowed in the first quarter but recovered significantly in the second quarter. Benefiting from the ongoing promotion of the AIP platform and improved feedback from partners, Citi expects US commercial revenue to grow by more than 65% year-over-year, and has further raised its long-term revenue forecast for 2027.

In contrast, growth in international government markets has been somewhat sluggish. In recent years, some European countries have continued to push for "digital sovereignty" strategies in an effort to reduce their reliance on US software platforms. Countries such as France, Germany, and Poland have gradually begun supporting local AI firms and seeking alternatives to Palantir. This suggests that the growth rate of the international government business may struggle to maintain its historical high levels going forward, and the US market will remain the company's most critical growth driver for the foreseeable future.

Palantir’s Edge Is AI Infrastructure, Not AI Models

OpenAI, Anthropic, and large cloud computing companies are accelerating their scramble for enterprise customers, making the competitive landscape for Palantir increasingly complex.

An increasing number of AI model providers are starting to directly target enterprise clients, hoping to leverage large model capabilities to integrate into enterprise workflows.

However, most generative AI products currently still focus on relatively simple scenarios such as text processing and office automation. In contrast, Palantir's long-accumulated capabilities in data governance, complex decision analysis, and cross-system data integration remain the strengths most valued by large enterprises and government agencies.

Many analysts believe that future enterprise AI competition will gradually shift from "model capability" to "system integration capability." Whichever player can truly integrate large models, security management, data governance, and business processes will have a better chance of securing long-term contracts.

From this perspective, Palantir still maintains a certain leading edge. However, as more tech giants enter the enterprise AI market, its technological advantage will continue to be tested by the market.

DA Davidson recently upgraded Palantir from "Neutral" to "Buy" and raised its price target to $175. Analyst Gil Luria believes that the expanding deployment of large language models by enterprises will drive market demand for AI orchestration platforms.

Palantir can leverage Foundry and Gotham to integrate large models into clients' existing data and decision-making workflows, a capability that remains difficult for pure-play model providers to replace for now.

Luria also pointed out that the recent disagreement between Anthropic and the U.S. government over restrictions on AI model usage further underscores Palantir's competitiveness in the government and defense markets. Leveraging its long-accumulated data security and compliance capabilities, along with a stable government customer base, the company still maintains a distinct advantage in high-security application scenarios.

Although Palantir's valuation is well above the software industry average, its revenue growth rate is roughly twice the industry average. Luria believes this partly explains the valuation premium the company currently enjoys.

Why Palantir Shares Could Rise to $200

Among the institutions bullish on Palantir, Oppenheimer analyst Param Singh's assessment is particularly positive. The firm expects the company's second-quarter revenue growth to potentially reach around 85% year-on-year, higher than management's previous growth guidance of approximately 79%.

If this forecast materializes, Palantir is not only expected to beat market expectations once again but may also sustain an extremely high growth rate for multiple consecutive quarters.

Oppenheimer also believes that the strong second-quarter performance could prompt management to raise its full-year outlook once again. Currently, the company's full-year revenue growth forecast is around 71%, but with US government contracts and commercial AI orders continuing to expand, there is a possibility that the full-year growth target could be raised to over 75%. Based on this assessment, the firm gives Palantir an 'Outperform' rating and sets a target price of $200.

Meanwhile, Citi also remains optimistic about the company's fundamentals. Although the bank recently lowered its target price for Palantir from $225 to $200, it still maintains a 'Buy' rating.

Analyst Tyler Radke raised forecasts for some business segments, particularly favoring the recovery momentum of the US commercial market. The lowered target price reflects more conservative valuation multiples rather than a rejection of the company's operating prospects.

Based on Palantir's current share price of approximately $131.53, the $200 target price implies a potential upside of about 52%.

MarketBeat data shows that among the 35 analysts covering Palantir over the past 12 months, 19 gave a 'Buy' rating, 2 gave a 'Strong Buy', 11 recommended 'Hold', and another 3 gave a 'Sell' rating, with an overall consensus rating of 'Moderate Buy'.

The 12-month average target price given by these analysts is $189.88, with the highest target price reaching $255.

Source: MarketBeat

'Big Short' Burry Remains Bearish on Palantir

However, while the market is generally optimistic about Palantir's fundamentals, bearish forces still persist.

Michael Burry, the real-life inspiration for "The Big Short," recently disclosed that he maintains his short position on Palantir, while continuing to hold put options on the Nasdaq 100 ETF (QQQ) and further increasing his short bets on the AI supply chain, including Nvidia, Micron, and semiconductor ETFs.

Burry believes that the current heavy demand for AI infrastructure is not entirely driven by end customers but is instead fueled by financing arrangements and capital cycling, meaning the overall industry valuation still faces significant correction risks. This perspective also reflects that market divergence over the AI sector's valuation remains pronounced.

Although Palantir's main business is software, which differs from chipmakers, as a key representative of AI concept stocks, the company's stock price still finds it difficult to completely escape the influence of market sentiment.