The largest AI supplier for the U.S. military has seen explosive performance! Palantir (PLTR.US) has significantly raised its full-year expectations, with the CEO stating that commercial demand is extraordinary.

Palantir (PLTR.US) raised its full-year revenue and profit forecasts after reporting second-quarter sales that far exceeded Wall Street expectations, describing business demand as extraordinary. The financial report showed that Palantir generated $1.94 billion in revenue, marking a 94.0% year-over-year increase and surpassing expectations by $130 million; the adjusted earnings per share were $0.41, exceeding expectations by $0.06. Palantir currently expects adjusted operating profit for the year to be between $4.89 billion and $4.91 billion, exceeding the previous upper forecast of $4.45 billion. The software developer and major defense contractor anticipates full-year sales could reach $8.16 billion, higher than the market average expectation of about $7.7 billion. Palantir CEO Alex Karp remarked that U.S. commercial sales in the second quarter were stunning, soaring 149% year-on-year to $764 million, well above the analysts' average expectation of $716.4 million. The stronger outlook helps alleviate investor concerns. Previously, investors worried that AI developers like Anthropic PBC, who sell their own software, as well as the increasing tendency of governments outside the U.S. to collaborate with domestic tech companies, could hurt Palantir's business. Karp responded to the concerns about AI startups replacing its business in a letter to investors on Monday, pointing out the risks of letting the models roam freely within their systems. Palantir's stock price rose as much as 14% in after-hours trading, reaching $142.91, compared to its closing price of $125.65 on Monday. Karp stated, This quarters performance is nothing short of remarkable. Such achievements would be astounding for any company; for one of our scale, size, and importance, it is truly extraordinary. Palantir initially gained fame as a mysterious Silicon Valley startup that sold customized data analytics software to the U.S. government and allied forces. Since the Trump administration, Karp, Chief Technology Officer Shyam Sankar, and other company leaders have increasingly shaped a pro-U.S. image, publishing works about the tech sector's need to reintegrate with the defense industrial base and speaking at conferences on the role of AI in warfare. Foreign governments have taken note of this trend. While Palantir's U.S. government business remains strong, European leaders have called for an increasing need for domestic tech companies to provide software for national security and critical operations. In recent months, officials in France and the UK have moved to terminate contracts with Palantir for considerations of tech sovereignty. In a call with analysts on Monday, Karp said, Sometimes we make decisions that go against our own economic interests, such as the support weve provided to numerous agencies in Europe, where the growth has been truly terrible. Palantir's international sales grew 33% year-on-year to $362.5 million. Meanwhile, domestic revenue in the U.S. increased by 115%, reaching $1.57 billion. In his letter to investors and during the analyst call, Karp portrayed Palantir's software as an alternative that can avoid direct collaboration with AI companies developing large language models (LLMs). He praised Palantir's clients for refusing to become vassal states of language labs and positioned his company as one that can allow you to switch models at any time. CFO Dave Glazer stated during the analyst conference call that Palantir's adjusted gross margin in the last quarter was 86%, slightly down from the previous three months due to the company covering cloud hosting fees for a government client. He warned that spending in the third quarter will increase, partly due to the seasonality of new employee recruitment and other product and marketing initiatives.