Palantir rises after Q2 results draw positive reactions from analysts

Shares of Palantir Technologies (NASDAQ:PLTR) jumped about 7% premarket on Tuesday after second quarter results and outlook beat expectations, drawing positive commentary from Wall Street analysts.

Morgan Stanley kept its Equal-weight rating on Palantir but raised the price target on the stock to $155 from $98.

Analysts led by Sanjit Singh said the second quarter marked eight straight quarters of revenue growth acceleration coupled with significant margin expansion. Strength was driven by U.S. commercial which accelerated again to +93% from +71% in the first quarter and government which accelerated to +49% from +45%.

The analysts added that the third quarter revenue guidance targets +50% year-over-year growth while 2025 revenue growth guidance raised by 9 points to +45% from +36% prior, with operating margin of 46% are best-in-class and underscores status as one of the clear AI winners, the analysts noted.

Singh and his team noted that the only pocket of weakness remains the international commercial business which declined -3% year-over-year after falling -5% in the first quarter.

Piper Sandler, which has an Overweight rating on Palantir, raised the price target on the stock to $182 from $170.

Analysts led by Brent Bracelin said the 10-year $10B Army deal strengthens the case for further government share gains within the large $1T+ Defense Total Addressable Market, or TAM, while 93% year-over-year growth (versus 71% prior) in U.S. commercial reinforces an untapped AI platform opportunity for large enterprise customers.

“While PLTR carries a rich valuation premium and remains a high-risk investment, the one-of-a-kind growth+margin model puts it into a unique category of one that warrants a premium, in our view,” said the analysts.

Cantor reiterated its Neutral rating on Palantir’s shares and increased the price target to $155 from $110.

Analysts Thomas Blakey and his team said that Palantir’s management’s guidance for U.S. Commercial implies sustained nearly 90% growth despite continued strong comparisons in the second half of 2024. The company saw record Total Contract Value, or TCV, bookings and remaining deal value, and Palantir appears focused on the U.S. region, which Cantor models to reach nearly 80% of revenue exiting 2026, up from its old forecast of 75%.

“Palantir remains a leader in leveraging AI secular growth trends, which appear to be accelerating industry-wide and for Palantir, with our Neutral rating informed by valuation continuing to discount this industry-leading position,” said the analysts.