1 Thing to Watch When Palantir Reports Earnings on Feb. 2
Key Points
Palantir's revenue growth has been accelerating over the past four quarters.
Palantir stock trades at an astronomical valuation.
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Palantir Technologies (NASDAQ: PLTR) continues to impress the market with its phenomenal growth and outstanding opportunities. Despite some doomsday predictions, Palantir stock ended 2025 up 135%, trouncing the market and most artificial intelligence (AI) stocks.
If you're following the company's meteoric rise and wondering what's coming next, here's what you should be paying attention to in the upcoming earnings report on Feb. 2.
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Accelerating or decelerating
What's fueling Palantir's incredible stock gains is its incredible growth. Palantir has become the poster child for AI stocks, but it uses AI in a very specific way, integrating with existing company data stores and offering data organization and analysis for large enterprises. It locks in long-term contracts from giants in many industries, including government and military, that provide years of recurring revenue streams.
It's only been public since 2020, and recently, it's been enjoying a scale that's leading to accelerating revenue growth. It's also becoming more profitable.
| Metric | Q4 24 | Q1 25 | Q2 25 | Q3 25 |
|---|---|---|---|---|
| Sales growth (YOY) | 36% | 39% | 48% | 63% |
| Adjusted operating margin | 45% | 44% | 46% | 51% |
Data source: Palantir quarterly reports. YOY = Year over year.
This is how it's able to carry an astronomical valuation of 416 times trailing-12-month earnings. Whether or not the stock continues to soar may largely depend on whether or not revenue continues to accelerate, or if it has finally reached a level of scale where growth begins to slow down. The most important thing to keep an eye on in the earnings report is whether revenue growth continues to accelerate or not.
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Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.
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