Palantir stock hits all-time high as AI software company exceeds $1 billion in quarterly revenue for the first time

Shares of Palantir Technologies (Nasdaq: PLTR) are surging to new highs after the company reported better-than-expected Q2 2025 results.

During the quarter, the AI software company saw its revenues surge nearly 50% and surpass more than a billion dollars—the company’s first quarterly 10-figure haul in its history. Here’s what you need to know.

What did Palantir report for Q2?

Yesterday, Palantir reported its Q2 2025 earnings after the closing bell. The company’s quarterly earnings were “phenomenal,” according to CEO Alex Karp. The headline result of the quarter is the billion-dollar revenue intake.

Total revenue for the quarter reached $1.004 billion. That’s just $4 million over the psychologically important 10-figure line. Palantir achieved that number by growing its revenue 48% year-over-year and 14% quarter-over-quarter.

U.S revenue was a big driver of the company’s financial intake for the quarter. The company’s stateside revenue grew 68% year-over-year and 17% quarter-over-quarter to $733 million.

That number includes 14% quarterly revenue growth from U.S. government sources, totaling $426 million. U.S. revenue from commercial sources was up 20% for the quarter to $306 million.

As noted by CNBC, Palantir exceeded its two most important metrics, based on LSEG estimates. The company’s total earnings per share (EPS) for the quarter were 16 cents (adjusted). Analysts had been expecting 14 cents per share. Palantir’s revenue haul of $1.004 billion also easily exceeded its expected quarterly revenue of $940 million.

The company’s Q2 revenue was, in large part, helped by its government contracts. Palantir has benefited from the Trump administration’s push to overhaul and streamline government operations, which include mass layoffs.

The work done by some of those who were laid off will be offloaded to AI and other software systems, which Palantir and other companies are in the business of providing.

Looking ahead to its Q3, Palantir forecasts another billion-dollar quarter. It says it expects Q3 2025 revenues to come in between $1.083 billion and $1.087 billion.

Good news for investors. What about employees?

Judging from the way PLTR stock is rising in premarket trading this morning, investors are clearly cheering Palantir’s results. But the company’s employees may not be.

After the company’s Q2 results were announced, Palantir CEO Alex Karp was interviewed by CNBC about the company’s AI software offerings and revenue results. During that interview, Karp told interviewer Morgan Brennan that workforce reductions are on the table thanks to efficiencies driven by artificial intelligence..

“We’re planning to grow our revenue . . . while decreasing our number of people,” Karp said. “This is a crazy, efficient revolution. The goal is to get 10x revenue and have 3,600 people. We have now 4,100.”

But as noted by CNBC, Karp did not reveal how the company would shrink its workforce from 4,100 to 3,600. Besides layoffs, companies have other options to reduce their workforce, such as freezing hiring and not replacing workers who voluntarily leave their roles.

The good and the bad of PLTR stock

After Palantir reported its Q2 results, the company’s stock jumped. As of the time of this writing, during premarket trading this morning, PLTR stock is currently trading up over 6.1% to $170.53. That means that PLTR stock is currently trading at an all-time high.

As of yesterday’s closing share price of $160.66, PLTR has seen its price rise by more than 112% since the year began. And over the past 12 months, PLTR shares have surged more than 549%.

However, it’s worth pointing out that some investors, while buoyed by Palantir’s recent gains, may also have reservations about its lofty stock price. At its current stock price, PLTR shares have a price-to-earnings (P/E) ratio of 730.27.

A triple-digit P/E ratio means that a stock’s price is currently far outstripping its earnings. Few major tech companies have a P/E ratio in the triple digits, although their are some notable exceptions. Tesla, for example, has a P/E ratio of 185. If future earnings don’t continue to match the rising price of the stock, shares could pull back.

Other tech companies have P/E ratios that most investors find more acceptable. This includes Microsoft (P/E of 38), Nvidia (56), Apple (30), Amazon (32), Alphabet/Google (20), and Meta (28).