Where to start
Focusing on US stocks' second-quarter earnings for fiscal year 2026, Palantir's CEO Alex Karp has positioned the company as the NVIDIA of the AI software space.
On Monday, Palantir delivered another stunning quarterly report: revenue surged 93% year-over-year, significantly surpassing prior guidance. Over the past three years, Palantir's revenue growth rate has accelerated every quarter, climbing from just 13% in the second quarter of 2023. During this period, quarterly revenue rose from $533 million to $1.9 billion. Following the earnings release, Palantir's pre-market stock price jumped 11%.
Why just Palantir's remarkable performance?
While its growth over the past three years hasn't matched that of NVIDIA — which, by dominating the AI chip market, saw its most recent fiscal year revenue soar from $27 billion three years ago to $216 billion — Palantir's performance remains extraordinary.
The most noteworthy aspect is that Palantir does not develop its own large language models. Instead, it has found a highly efficient profit model: building software on top of other companies' AI models to generate substantial profits. In the first half of 2026, Palantir generated $2.1 billion in cash flow from operations, with capital expenditures of just $22 million. This is the exact goal every other software company is chasing, and Palantir is already far ahead.
As my colleague Laura Bratton noted, Palantir offers an end-to-end software solution that helps clients connect and integrate data stored on platforms like Snowflake, Salesforce, and SAP. The company develops its own AI agents and applications to access this data, while also providing a consulting team to assist clients in deploying AI initiatives.
Co-founder and CEO Alex Karp's unique, publicity-savvy approach has also fueled the company's momentum. He frequently warns about the potential risks posed by AI companies like Anthropic and OpenAI, a narrative that simultaneously serves as a marketing boost for Palantir's business. In a letter accompanying the earnings release, Karp reiterated a view he has recently shared often, including at a conference within the past month: "Global institutions are gradually realizing the risk: if you hand over the keys to your organization's core data to the developers of large language models, the consequences could be dire." He argues that major AI companies are aiming to capture institutional data resources. While this rhetoric may sound exaggerated, it hasn't hindered Palantir's robust growth.
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