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Most Palantir Investors Are Focused on 93% Revenue Growth - Here’s the Valuation Warning They’re Missing

Revenue surged 93% in Q2 while the stock trades at 75 times trailing sales

By Damilola Esebame, CFEI® , Edited by Laura Hohenstein

Updated Oct. 10, 2026

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Palantir Technologies (PLTR) led a five-stock AI software analysis that included CrowdStrike, SoundHound AI, AppLovin, and ServiceNow, with Palantir's stock ranked as the most expensive stock on this list.

Q2 2026 revenue surged 93% year over year to $1.94 billion, beating the $1.80 billion consensus estimate. Citi analysts expressed concern over how the stock can grow into its valuation even with strong fundamentals. Examining the hidden signs of financial stability in each company's results can help you measure how much risk each multiple already assumes.

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Q2 revenue surged 93% to $1.94 billion, with United States commercial up 149%

Palantir's Q2 2026 revenue reached $1.94 billion, a 93% increase year over year that beat the $1.80 billion consensus estimate, and United States (U.S.) commercial revenue of $764 million climbed 149% as enterprise customers accelerated adoption of the company's AI platform, Quartz showed.

Quartz also noted that the U.S. government revenue hit $809 million, up 90%, and total U.S. revenue of $1.57 billion rose 115%, reflecting broad-based demand across both the public and private sectors that you should weigh against the valuation premium the stock carries.

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Net income tripled to $1.06 billion, and full-year guidance rose to $8.15 billion

Net income reached $1.06 billion, more than triple the $326.7 million posted a year earlier, and adjusted earnings per share (EPS) of $0.41 beat the $0.35 analyst estimate, Quartz reported. Revenue guidance for the full year rose to at least $8.15 billion from the prior range of $7.65 billion to $7.66 billion.

Palantir Chief Executive Alex Karp told CNBC that the growth "looks like this is going to go on for at least another 18 months," Quartz documented. The 18-month growth window Karp described gives you a timeline to measure future quarters against, and any deceleration within that stretch would challenge the stock's premium.

The stock trades at roughly 75 times trailing sales, the steepest multiple in the group

Palantir trades at roughly 75 times trailing sales at approximately $192 per share, making it the most expensive name in the five-stock group by a wide margin compared with CrowdStrike at 51 times, AppLovin at 20 times forward earnings, and ServiceNow at 29 times, The Motley Fool showed.

Citi analysts, after meeting Palantir Chief Financial Officer David Glazer, said they "continue to have concerns" about the multiple even as fundamentals remain strong, Sherwood noted.

CrowdStrike, AppLovin, and ServiceNow trade at lower multiples with strong growth

CrowdStrike, AppLovin, and ServiceNow each trade below Palantir's multiple while posting strong AI-driven growth of their own, The Motley Fool reported.

CrowdStrike trades at about 51 times sales with an annual recurring revenue (ARR) of $5.25 billion growing 24%, and its Falcon Flex platform reached $2.29 billion in ARR with 101% year-over-year growth.
AppLovin trades at roughly 20 times forward earnings after revenue grew 59%, and its Axon ad-targeting engine expanded 700% in a single quarter.
ServiceNow trades at about 29 times forward earnings, and its AI annual contract value crossed $1 billion while production AI deployments rose ninefold in nine months.

SoundHound trades at 12 times sales after a 41% decline in 2026

SoundHound AI trades at roughly 12 times sales after the stock fell 41% in 2026, and Q2 revenue of $61.9 million rose 45% to a record, with customers spanning restaurants, automakers, and call centers, The Motley Fool outlined.

The bull case rests on revenue growth above 40% translating into profitability, while the bear case points to continued cash burn without a clear path to positive earnings.

Total contract value reached $3.37 billion as bookings accelerated 49%

Total contract value closed in Q2 reached $3.37 billion, a 49% increase year over year, with U.S. commercial contract value hitting a record $2.13 billion, Quartz showed.

U.S. commercial remaining deal value reached $6.24 billion, more than double the year-earlier figure, and Palantir counted 615 domestic commercial customers as of Q1, a 42% increase. The contract backlog gives you a forward indicator of revenue durability beyond the quarterly growth headline.

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Citi flagged concerns over how far growth expectations are priced in

Citi's assessment, issued after a meeting with Palantir's Chief Financial Officer in New York, acknowledged strong fundamentals but questioned whether estimate revisions will continue at the pace the valuation requires, particularly if large contracts do not materialize as expected, Sherwood outlined.

The U.S. government remains Palantir's single largest customer, and Citi pointed to international commercial and government growth in the Middle East as an additional driver the market has not fully priced in.

Bottom line

Palantir leads the five-stock group on revenue growth but carries the steepest valuation risk at 75 times trailing sales, and AppLovin at 20 times and ServiceNow at 29 times offer growth at lower entry points for your portfolio. The Q2 results and full-year guidance of at least $8.15 billion give the company room to grow into the multiple over time.

Citi's concerns about the valuation gap remain relevant, and the analyst's language should shape how you weigh the price against the earnings trajectory. Pairing your analysis with the must-have investing apps for tracking valuations and earnings revisions can help you act on the data rather than the sentiment.

This article is for informational purposes only and should not be considered investment advice.

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Author Details

Damilola Esebame, CFEI®

Damilola Esebame, CFEI®, is a financial journalist who specializes in investing and turning complex market topics into practical guidance. He grew a four-figure investment portfolio into six figures by combining long-term S&P 500 investing with carefully managed debt financing, a strategy he now writes about for readers building their own portfolios.