Palantir Just Printed A 93% Growth Quarter And The Stock Ripped 13% After Hours — Here Is What Actually Matters

Palantir reported the second quarter at 4:05 p.m. Eastern and the tape did what the tape does when a company beats on every line at once. PLTR closed the regular session at $125.65, up 2.10% on 68 million shares. Twenty minutes after the release it was trading around $142 — call it up 13% after hours.

Here is the part people forget in the excitement: this stock is still down roughly 30% on the year going into tonight. That matters more than the beat. A 13% gap on a name that has been getting sold all year is a different animal than a 13% gap on a name sitting at all-time highs. One is short covering plus repositioning. The other is exhaustion. I think tonight is mostly the first one.

Revenue was $1.935 billion, up 93% year-over-year and up 19% sequentially, against a Street number near $1.80 billion. That is not a beat, that is a different quarter than the one analysts modeled.

U.S. revenue was $1.573 billion, up 115%. Inside that, U.S. commercial was $764 million, up 149% year-over-year and 28% quarter-over-quarter. U.S. government was $809 million, up 90%. Both halves of the business accelerating at the same time is the single most important line in the release, because the old bear case was always that government was the whole company and commercial was a story.

Profitability: GAAP income from operations of $912 million on a 47% margin. Adjusted operating income of $1.194 billion on a 62% margin. GAAP net income of $1.062 billion, GAAP diluted EPS of $0.41 versus roughly $0.35 expected. Cash from operations $1.216 billion, adjusted free cash flow $1.220 billion — a 63% margin. Rule of 40 score of 155%. I have been in this business thirty years and a 155 Rule of 40 at nearly $8 billion of run-rate revenue is not a normal software number.

Bookings tell you where the next two years go. Total contract value closed was $3.373 billion, up 49%. U.S. commercial TCV was a record $2.132 billion, up 153%. U.S. commercial remaining deal value is $6.238 billion, up 124% year-over-year and 27% sequentially. They closed 220 deals over $1 million, 98 over $5 million, 73 over $10 million. And there is $9.2 billion of cash and short-term Treasuries on the balance sheet with essentially no debt.

Q3 revenue guidance is $2.160 to $2.164 billion with adjusted operating income of $1.292 to $1.296 billion. Full year goes to $8.150 to $8.158 billion — roughly 82% growth. U.S. commercial full-year guidance goes above $3.424 billion, at least 134% growth. Adjusted operating income guidance goes to $4.889 to $4.897 billion, and adjusted free cash flow to $4.5 to $4.7 billion.

Raising a full-year number by that much in August is management telling you the pipeline is already signed, not hoped for. Look at the remaining deal value line again and the guide stops looking aggressive. That is why the after-hours move stuck instead of fading in the first ten minutes — this was a guidance print, not an EPS print.

Karp's language — 'demand for AI sovereignty has now been unleashed,' 'this quarter was otherworldly' — is Karp being Karp. Ignore the theater and read the sovereignty argument literally: enterprises and governments are paying not to have their operations become somebody else's training data. Whether or not you like the pitch, customers are signing on it.

Stock-based comp was $265 million in the quarter, up from $160 million a year ago. That is why GAAP and adjusted EPS both round to $0.41 this quarter and why the adjusted net income line needs a $297 million tax adjustment to get there. Dilution is real and the share count keeps drifting.

Accounts receivable went from $1.042 billion to $1.485 billion in six months while revenue nearly doubled. Cash collection is keeping up so far — $2.115 billion of operating cash flow in the half says it is — but receivables growing faster than revenue is the line I watch next quarter.

And the valuation argument does not go away because of one quarter. It gets deferred. At roughly $142 the market is paying up for a company where the bull case now requires the acceleration to hold through 2027. That is a much better problem than the one PLTR holders had this morning, but it is still the problem.

I do not chase after-hours prints. Thin books make prices that do not survive contact with real size, and the 4:20 p.m. quote is not the market — it is a suggestion. The number I care about is where this settles between 9:30 and 10:00.

The setup I want is a gap that holds. If PLTR opens near $140 and spends the first fifteen minutes making higher lows above the opening range, the risk is defined and cheap — you are long against the low of the range with a real catalyst behind you. If it opens $145 and immediately fails the opening print on heavy volume, that is the classic gap-and-crap into trapped longs from the after-hours session, and the short is the trade, not the dip-buy.

The tell is relative volume in the first hour versus the pre-market range. Big volume, small range, price above VWAP means institutions are still building. Big volume, big range, price losing VWAP means they are selling into your enthusiasm. This is the same read I run on every gapper, and Palantir is not special because it has a good story — it is just a bigger version of the same pattern.

Position sizing note, because it is the part that actually decides your year: a 13% overnight gap means tomorrow's realized volatility is going to be double what your normal sizing assumes. Cut the size, not the conviction.

Two weeks ago the story in this market was forced selling — a levered AI-infrastructure book unwinding and dragging everything correlated down with it. Tonight the story is a company inside that same theme printing 93% growth and raising the year. Both are true. That is what a repricing looks like from the inside: the leverage gets flushed and then the fundamentals show up late and prove the theme was never the problem, the positioning was.

The market's next question is whether this generalizes. If PLTR's commercial acceleration is a read-through on enterprise AI budgets broadly, then the software tape that has been left for dead all year gets a bid. If it is Palantir-specific — a sovereignty niche nobody else can serve — then it is one stock going up and the rest of the group stays broken. I lean toward the second, which means I trade PLTR and not the sector ETF.