To The Moon

$Palantir Technologies Inc.(PLTR)$’s latest earnings release for Q2 2025 has been a significant milestone, with the company surpassing $1 billion in quarterly revenue for the first time. This achievement, coupled with strong growth and profitability, has sent the stock soaring. However, the question of whether its high valuation is still a concern for investors is a critical one.

I am holding Palantir for long-term, and in this article I would like to share what are the things we should be looking at the Q2 2025 earnings result and what are the strategies we could still use to do trading on Palantir though the share price is at a new highs. We will also be looking into the valuation dilemma.

Here is an analysis of the latest results and how investors should be looking at this AI stock:

Q2 2025 Earnings Highlights

Revenue Beat: Palantir's revenue of just over $1 billion significantly beat Wall Street's expectations. This represents a 48% year-over-year growth, showing a radical acceleration in its business.

Strong U.S. Commercial Growth: The U.S. commercial segment was a standout, with revenue surging 93% year-over-year. This indicates that the company's AI Platform (AIP) is gaining strong traction outside of its traditional government business.

Profitability: Palantir's profitability also impressed, with an adjusted operating margin of 46% and a strong "Rule of 40" score of 94. This metric, which combines revenue growth and profit margin, demonstrates the company's ability to grow rapidly while also becoming more profitable.

Guidance Raised: Palantir raised its full-year 2025 revenue guidance to between $4.142 billion and $4.150 billion, a significant increase that reflects management's optimism about continued growth.

The Valuation Dilemma

Even with these stellar results, Palantir's valuation remains a point of contention for some. The stock has been on a phenomenal run, up over 500% in the past year and more than 100% year-to-date. This has pushed its valuation metrics to extremely high levels. While some fair value estimates peg the stock as overvalued, the market continues to reward the company's performance.

The high valuation is largely a bet on Palantir's future growth potential, especially in the AI space. Investors are essentially paying a premium for a company they believe will continue to dominate its niche and expand into new markets.

How Investors Should Look at Palantir

Given the current context, here's how investors should approach Palantir:

Growth-Oriented Mindset: Palantir is not a value stock. It is an investment in a high-growth, high-potential AI company. Investors should focus on key growth indicators like revenue growth, especially in the commercial sector, and customer acquisition.

Focus on the "Why": The most important question for investors is why Palantir is growing so fast. The company's AI platform and its ability to secure large, multi-year contracts with both government and commercial clients are the driving forces. The recent earnings report shows that this momentum is not slowing down.

Acknowledge the Risks: The high valuation does make the stock susceptible to significant pullbacks if the company fails to meet or exceed expectations in future quarters. Competition from other AI and software companies, as well as economic uncertainties affecting customer spending, are also factors to consider.

Long-Term Horizon: For investors who believe in Palantir's long-term vision and its role as a leader in AI software, the current valuation may be less of a concern. The company's growing profitability and massive total addressable market suggest that there could still be significant upside, even from these elevated levels. However, this is a stock for those with a high-risk tolerance and a long-term investment horizon, not for those seeking short-term stability.

Palantir just delivered a blockbuster Q2 2025 earnings beat—EPS of $0.16 vs. $0.14 expected, revenue topping $1B, and U.S. sales up 68% YoY. The stock surged 4.14% in after-hours, and options pricing implies a potential ±11% move by week’s end.

Given this setup, here are a few strategy angles worth considering:

Momentum & Breakout Play

• Setup: Price nearing 52-week high of $161.40; current level ~$158.71

• Strategy: Use a breakout trigger above $162 with confirmation from volume and RSI >70

• Risk Management: Tight stop-loss below $155 to guard against earnings fade

AI Convexity Thesis

• Macro Overlay: Palantir is riding the AI arms race tailwind, with sticky gov contracts and accelerating U.S. commercial adoption

• Approach: Build a barbell sleeve—pair PLTR with other AI infra names (e.g., NVDA, SNOW) and hedge with volatility overlays

• Optionality: Consider call spreads targeting $170–$180 range if momentum sustains

Volatility Cone & Earnings Drift

• Historical Drift: Avg post-earnings move >17% over last 4 quarters

• Strategy: Use volatility cone analysis to size short-term swing trades or straddle setups

• Tools: Overlay Bollinger Bands and MACD divergence to time entries

Tactical Rotation Dashboard

• Sector Flow: PLTR’s strength may signal rotation into AI software and defense-tech

• Action: Track ETF flows (e.g., ARKQ, XAR) and build a thematic dashboard to monitor relative strength vs. peers

Here is a breakdown of each Palantir trading strategy, with key strengths and cautions mapped out:

Each approach offers distinct lenses: breakout trades for precision timing, barbell sleeves for structural exposure, volatility tools for probabilistic mapping, and dashboards for thematic breadth.

Momentum & Breakout Strategy

AI Convexity Barbell Approach

Volatility Cone & Earnings Drift Setup

Tactical Rotation Dashboard

Technical Analysis - Exponential Moving Average (EMA)

Palantir is currently trading at around 165. So the next psychological numbers per share would be 170-180, PLTR has a fantastic earnings. The bulls are still in control of this one.

We can see that the higher lows are set at the lows of last Friday 150 level, so if there is any move lower, we could be looking for a higher low to continue the trend. So eventually we might lose this and go into a daily downtrend.

But this is not the case now, and by looking for a weekly higher low. anything above 128. The bulls would be looking for a higher low for possible for their trend continuation.

Final Note

While PLTR might be at a new highs, I always believe that there is still opportunities to take a trade, so I will continue to look at short-term trade while holding my long-term portfolio for Palantir.

Palantir's share price surged due to its first $1 billion revenue quarter, driven by a 93% growth in its U.S. commercial business and strong profitability. This performance, along with raised full-year guidance, proved the effectiveness of its AI platform (AIP) and signaled accelerated growth.

For the stock to continue its ascent, Palantir must maintain this momentum by expanding its customer base and consistently beating expectations. However, its high valuation could make the stock vulnerable to any future disappointments or broader market corrections.

Summary

Palantir's Q2 2025 earnings release was a landmark event that provided strong evidence of its accelerating growth and profitability. While the valuation remains a concern for some, the company's performance, particularly in the U.S. commercial sector, provides a compelling argument for its premium price tag.

While there are still investors who are contending with the high valuation, by studying into the latest fiscal Q2 earnings, it looks like PLTR could continue to create new high in its revenue. So this might be a good time to seriously look at this AI stock.

Appreciate if you could share your thoughts in the comment section whether you think PLTR is a good stock to trade and invest though the share price is near or at all time high.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.