Palantir Technologies surged past Wall Street’s expectations in the second quarter of 2025, posting $1 billion in revenue for the first time — a milestone that analysts had not anticipated until late in the year.
The strong performance, propelled by soaring demand for artificial intelligence software and an influx of U.S. government contracts, sent shares up over 4% on Monday and helped push the company’s market capitalization beyond $379 billion, making it one of the 10 most valuable tech firms in the U.S.
The Denver-based company reported adjusted earnings per share of 16 cents, beating the 14 cents that analysts projected. Revenue climbed 48% year-on-year to exactly $1.00 billion, outpacing estimates by $60 million.
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“We’re planning to grow our revenue … while decreasing our number of people,” CEO Alex Karp told CNBC, describing the company’s direction as a “crazy, efficient revolution.” Karp said the goal is to reach 10 times the current revenue with just 3,600 employees, compared to the current headcount of 4,100. He stopped short of saying whether job cuts were imminent.
Palantir’s results were driven by a sharp rise in U.S. government and commercial spending. U.S. revenues jumped 68% to $733 million, while U.S. commercial business nearly doubled to $306 million. The company said it closed 66 deals worth at least $5 million and 42 deals worth $10 million or more during the quarter. Total contract value rose 140% to $2.27 billion.
The company credited part of its momentum to President Donald Trump’s push for greater government efficiency, which involved slashing contracts and cutting staff across federal agencies. Those changes, Palantir said, opened up a new lane for its government-facing services, particularly as agencies turn to automation and artificial intelligence to streamline operations. Revenues from U.S. government agencies rose 53% to $426 million.
Palantir also raised its full-year guidance. It now expects revenue between $4.142 billion and $4.150 billion, significantly up from its earlier range of $3.89 billion to $3.90 billion. For the third quarter alone, the company is projecting revenue between $1.083 billion and $1.087 billion, again beating analysts’ expectations of $983 million.
Operating income and free cash flow guidance were both lifted as well, signaling strong internal confidence in the company’s near-term profitability.
In a letter to shareholders, Karp described Palantir’s recent climb as “a reflection of the remarkable confluence of the arrival of language models, the chips necessary to power them, and our software infrastructure.” The company has become a standout beneficiary in the AI race, especially amid broader corporate and governmental adoption of large language models and real-time data analytics.
Palantir’s net income more than doubled to $326.7 million, or 13 cents a share, compared to $134.1 million, or 6 cents a share, in the same quarter a year earlier.
Investors have piled into Palantir stock this year on the back of its AI tools and defense contracts. Shares have more than doubled, and the company now commands a valuation higher than tech mainstays like Salesforce, IBM, and Cisco. However, that momentum has come with a steep price tag: shares trade at 276 times forward earnings — a premium exceeded only by Tesla among the top 20 most valuable companies in the U.S.
With market expectations reset and political momentum behind government tech upgrades, Palantir is positioning itself not just as a dominant AI company, but one shaping the backbone of digital governance in Trump’s second term.