Palantir does not do quiet quarters. The Q2 2026 report, released August 3, showed revenue of $1.94 billion against roughly a $1.80 billion consensus, growing 93% from roughly $1.0 billion a year ago. For a company that spent most of the first half of 2026 being written off as a bubble, that is a meaningful number. U.S. commercial revenue surged 149% year over year to $764 million and, compounding since 2024, has now jumped 380%.

The stock responded. Shares ripped higher over the month following the earnings report. Then, last week, another catalyst landed. PwC US and Palantir announced an expansion of their strategic alliance, targeting three transformation areas: scaling enterprise AI, transforming mergers and acquisitions, and modernizing enterprise resource planning systems. The companies are introducing an AI-native deals platform designed to help clients execute transactions up to 50% faster and cut one-time transaction costs by up to 45%. The stock jumped on the news.

Why Wall Street Is Paying Attention

U.S. commercial client revenue skyrocketed 149% year over year, heavily driven by enterprise demand for data privacy and AI sovereignty, with companies seeking to prevent corporate data from being absorbed by frontier large language models. That is not a niche use case. Every major corporation running sensitive financial, legal, or operational workflows has the same concern.

Management raised full-year 2026 revenue guidance to between $8.150 billion and $8.158 billion, implying 82% year-over-year growth. Full-year adjusted free cash flow is now projected in a $4.5 billion to $4.7 billion range. For a software company still burning through talent to stay ahead, those are not small commitments.

Palantir’s adjusted free cash flow margin was 63% last quarter, and management said net dollar retention was 157%.

What Could Go Wrong

Valuation is the legitimate objection and it remains a serious one. Palantir carries a forward price-to-earnings ratio above 110x, as of early September. That is not a number you defend with one quarter of strong results, however strong. Michael Burry has renewed his bearish stance on Palantir, citing concerns over its accounting practices and market valuation, according to commentary reported in early September.

The company still faces risks tied to its customer mix and the timing of large contracts. Shifts in government spending or delays in major renewals could make quarterly results less predictable. No new contract value or revenue contribution from the PwC deal was disclosed, making adoption and resulting commercial activity important measures of the alliance’s actual impact.

The next earnings report is expected in early November, but the company has not confirmed a date. That is a long runway for the valuation debate to run in either direction.

The Bottom Line

Palantir is generating real revenue at an extraordinary growth rate, with margins most software companies would spend years trying to reach. U.S. government revenue alone grew 90% from a year ago to $809 million. The PwC expansion adds a credible commercial distribution channel for AIP across M&A workflows and ERP modernization, two areas where enterprises spend heavily and switch infrequently. The valuation is genuinely demanding. The growth rate, if it holds even partially, is the only argument that makes the price defensible. At around $174-$179, with November earnings still two months away, this is a stock where conviction about AI enterprise spending determines whether the risk is worth taking.