Palantir Q2 Beat and Raised Guide Fuel 15% Rally, Valuation at 42x Revenue

What happened

Palantir reported Q2 revenue of $1.94 billion, up 93% year over year, and raised its full-year 2026 revenue guidance to $8.15 billion, with U.S. commercial growth now seen at least 134%. The stock jumped 15% to around $163, pushing its valuation to 42 times trailing revenue. While the results confirm accelerating demand and widen management's outlook, the premium multiple reflects high expectations that assume flawless execution. Our DeepValue analysis already priced the stock for sustained hypergrowth, and the post-pop level tops our $160 base-case estimate. The next catalyst will be whether $4.9 billion in remaining performance obligations converts into near-term revenue at above 43% in the coming quarters.

Implication

The Q2 beat and raised guide validate Palantir's exceptional momentum, but the stock's surge to $163 leaves it pricey at 42x revenue. Investors should wait for a pullback toward $135 or evidence that RPO conversion improves above 43% to add positions. The bull case hinges on Maven adoption spreading through defense bureaucracies, but until that turns into booked backlog, the current price already discounts much of the good news.

Thesis delta

The strong quarter reaffirms our base case, but the rally pushes the stock slightly above our $160 implied value. We maintain our wait rating, as the entry point has become less attractive; a move toward $135 or improved RPO conversion would justify a more bullish stance.