Palantir Technologies Inc (NASDAQ: PLTR) has long been the Pentagon’s favorite software company. That’s not a slur. It’s simply how the business earned its reputation.
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For years, government contracts supplied credibility, drove most of the growth, and gave investors an easy way to explain what Palantir actually did. The company reported another blockbuster quarter, beating expectations with non-GAAP EPS of $0.41 on $1.94 billion in revenue while lifting its full-year revenue outlook once again, and causing the stock to surge about 16%.
The first few pages looked like another textbook Palantir earnings beat. Except that Palantir this quarter made a huge statement against the “pentagon” label, and with heavy numbers to back it up
The pace of customer commitments explains why. You see, Palantir signed 220 deals worth more than $1 million during the quarter. Seventy-three exceeded $10 million while 15 crossed the $100 million mark. U.S. commercial total contract value jumped 153% to $2.13 billion, and remaining deal value climbed 124% to $6.24 billion. Those figures tell me companies aren’t experimenting with Palantir’s software anymore, they’re weaving it into how they expect to operate years from now, which is a fundamentally different relationship than a pilot program or an annual subscription renewal. In other words, while government contracts built Palantir’s reputation. Commercial customers are rebuilding its identity.
Last Year’s Revenue Doesn’t Even Cover This Year’s Profit
Revenue nearly doubled to $1.94 billion, yet profitability expanded even faster, which is the exact sequence a scaling software business is supposed to produce but rarely actually delivers. GAAP operating income climbed to $908 million. Adjusted operating income reached $1.21 billion. Adjusted free cash flow came in at $1.22 billion. Suggesting that the company is becoming more efficient as its software deepens inside existing customer relationships, which is what happens when the product solves a problem that compounds in value the longer it runs.
Winning a customer is easy to celebrate. Keeping that customer long enough for margins to widen, cash flow to accelerate, and profits to compound is where enduring software businesses separate themselves from ones that simply look impressive on a quarterly beat. I came away from this section of the report thinking less about AI and more about how fast the business model is stronger.
An End To The Valuation Debate?
Almost every discussion about Palantir circled back to the same question: how can a company trading at this multiple possibly justify it?
Post earnings, the stock opened at $144.47, hit a high of $147.50, and closed at $145.75 – up 16% on the session – on volume of 2.50 million shares that exceeded recent average activity by a significant margin.
More importantly, that move sliced through the 20-day moving average at $129.28 and the 50-day at $130.66 simultaneously in a single session, two levels that had been capping every meaningful rally attempt since the stock rolled over from its February highs near $185. The 200-day moving average at $152.45 is the next meaningful test and the level I’d watch as the stock decides whether this is a breakout or a bounce. Clearing it on similar volume would confirm the structural shift. Stalling here would tell you institutions are trimming into strength rather than adding.
The Customers Reached This Conclusion Before Investors Did
As much as this quarter tried to convince me, I don’t think Palantir stopped being a government company this quarter.
The Pentagon isn’t going anywhere. Neither are the intelligence agencies and defense contracts that built Palantir into what it is today. But after reading this report, corporate America has become equally important to the next chapter of this business because the customer dynamics are structurally different. Governments buy carefully and renew predictably. Businesses buy repeatedly and expand aggressively when the software works, and when hundreds of companies are signing eight- and nine-figure contracts within a single quarter, the investment case stops being “Washington spending” and becomes something harder to cap.
I’ve heard people call Palantir expensive for years. Maybe it is. But customers don’t commit billions of dollars because a stock trades at a rich multiple. They commit because the software solves a problem worth paying for. The 153% growth in commercial contract value, the 124% growth in remaining deal value, and the 220 deals signed in a single quarter all suggest those customers reached their conclusion a while ago. Wall Street is only now beginning to catch up.
Today’s editorial pick for you
Palantir Technologies is Still One of the World’s Biggest AI Beneficiaries
Posted On Aug 04, 2026 by Ian Cooper
Palantir Technologies (NASDAQ: PLTR) had another very strong quarter, showing that demand for artificial intelligence software continues to grow at a rapid pace. The company reported much better financial results than analysts expected and raised its outlook for the rest of 2026, sending its stock sharply higher after the earnings announcement.
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The software company generated $1.94 billion in revenue during the second quarter, a 93% increase compared with the same period last year. That easily beat analysts’ expectations of about $1.8 billion. Adjusted earnings also came in above forecasts, showing that Palantir is not only growing quickly but is also becoming more profitable.
Gold has dipped more than 15% this year. And right now, as you read this sentence, that dip could already be the bottom. Meanwhile, the institutions that print the world's money are dumping their own paper to grab gold at a record pace.
What do they know that the average American doesn't?
Palantir has become one of the biggest winners from the AI boom. While many companies are still experimenting with artificial intelligence, Palantir focuses on helping businesses and government agencies use AI with their own data.
Its software allows organizations to analyze information, automate tasks, and make faster decisions without giving up control of sensitive data. That approach has become increasingly attractive as more companies look for secure ways to use AI.
One of the biggest highlights from the quarter was the company’s U.S. commercial business. Revenue from American commercial customers jumped 149% from a year earlier to $764 million, making it one of Palantir’s fastest-growing business segments.
Government business also remained strong. Revenue from U.S. government customers increased about 90%, showing that federal agencies continue to spend heavily on Palantir’s software and AI tools.
Record Contract Activity
The company also signed an impressive number of new deals during the quarter. In fact, it closed about $3.37 billion worth of contracts.
Another positive sign was free cash flow, which reached $1.22 billion during the quarter. This marked the first time the company generated more than $1 billion in free cash flow in a single quarter, giving Palantir additional resources to invest in future growth.
Even better, it raised its financial guidance for the rest of the year.
The company now expects 2026 revenue between roughly $8.15 billion and $8.16 billion, higher than its previous forecast. Raising guidance is often viewed as a sign that management believes customer demand will remain strong in the coming months.
CEO Highlights “AI Sovereignty”
CEO Alex Karp used the earnings call to discuss what he believes makes Palantir different from many other AI companies. He argued that businesses want to keep ownership of their own information rather than sending valuable data to outside AI providers. Karp described this strategy as helping customers maintain “AI sovereignty,” meaning they stay in control of their data, models, and intellectual property.
Karp also criticized some large AI companies, saying they expect businesses to hand over valuable data that could eventually help train competing AI systems. He said Palantir’s approach is designed to protect customer information while still delivering powerful AI capabilities.
Looking Ahead
Palantir’s latest earnings report reinforces its position as one of the fastest-growing software companies in the AI industry. Strong demand from both businesses and government customers helped drive nearly double-digit revenue growth, while record contract activity and improving cash flow showed that customers continue making large investments in the company’s technology. With management now expecting even stronger sales for the rest of the year, investors will be watching closely to see whether Palantir can maintain its remarkable momentum.
If demand for enterprise AI continues to grow, the company could remain one of the biggest beneficiaries of the ongoing artificial intelligence boom. Palantir Technologies had another very strong quarter. The company reported much better financial results than analysts expected and raised its outlook for the rest of 2026, sending its stock sharply higher after the earnings announcement.
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One analyst believes a little-known company today is in a remarkably similar position — and he's revealing the name and ticker in a new free presentation.
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Pull up almost any real estate investment trust and the payout ratio will look wrong. A REIT distributing well more than it earns, quarter after quarter, sometimes by a wide margin. On a utility or a consumer staple that would be a warning worth acting on. On a REIT it is mostly arithmetic. Depreciation is a large non-cash charge written against a building that may be worth more today than it was ten years ago, and it runs straight through net income on the way to the bottom line. The industry's own measure, funds from operations, adds that depreciation back and takes property sale gains out. FFO is closer to the cash the buildings actually threw off.
Which means the coverage question for a REIT is the payout measured against FFO, not against earnings per share. That one substitution changes the read on a great many income names, and it is why the sector can keep lifting distributions in years when reported earnings barely move. It also explains the 90% rule, the requirement that a REIT distribute at least 90% of its taxable income to keep its tax status. That is a floor under the payout rather than a sign of strain. S&P Global Market Intelligence expects U.S. REITs to distribute roughly $61.5 billion in 2026, about 4.9% more than last year. None of that requires reported earnings to grow in step.
That does not make a REIT distribution safe. FFO can fall, and when it does the payout follows it down. Simon Property Group, run by chairman and chief executive David Simon, declared $2.10 a share in the first quarter of 2020 and cut to $1.30 on June 29 of that year, a reduction of about 38%. Holders reading the yield rather than the cash flow found out the slow way. The declared dividend worked back to $1.90 by the fourth quarter of 2023, still short of where it began almost four years earlier. The right ratio tells you whether today's payout is being covered. It tells you nothing at all about whether next year's rents hold up. The filing says more than the yield does.
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💵 INCOME WATCH
Declared. AdvanSix declared a quarterly dividend of $0.16 a share on August 7, payable September 1 to holders of record on August 18. Blue Owl Capital Corp declared a third-quarter base dividend of $0.31 a share on August 4. Broadridge's 12% annual raise, filed August 3, was covered here last week. A quiet stretch otherwise.
Ex-dates ahead. AdvanSix's record date of August 18 puts its ex-date at the start of that week. Beyond that, the next five trading days look thin for widely-held income names, and I would rather report the calendar as thin than guess at dates.
Yield check. The 10-year Treasury was 4.72% on August 10, against 4.63% on August 4. The 30-year sat at 5.25% the same day. SCHD's forward yield was 2.95% as of August 11.
📅 TOMORROW'S CALENDAR
Producer Price Index for July, 8:30 a.m. ET. Read the services line first. It feeds the Fed's preferred inflation gauge more directly than the goods line does.
Weekly jobless claims, 8:30 a.m. ET. The single week matters less than whether the four-week average has started drifting in one direction.
The Fed's H.15 selected rates release, 4:15 p.m. ET. Wednesday's 10-year print lands there, and that is the number every income comparison in this letter starts from.
You probably own a REIT somewhere. Do you track its FFO payout or its yield? I'd like to hear it, just reply.
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