Raising Our Palantir Price Target Further as RPOs Paint a Beautiful Picture
Palantir was arguably the poster child for AI adoption in the second quarter.
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Tuesday morning, we lifted our price target on Pro Portfolio position Palantir Technologies PLTR to $175 from $160, but after a more thorough review of the company’s earnings call, we are lifting it a bit further to $190. While not as high as own Sarge Guilfoyle's new Wall Street high target, it will keep our Two rating intact, especially as we agree with his $142-$153 pickup level.
Stepping back to the company’s June-quarter results, Palantir was arguably the poster child for AI adoption given the following metrics:
U.S. commercial revenue up 93% year over year, U.S. commercial customer count up 64% on the same basis, which led U.S. commercial contract value to climb 222% year over year to $843 million. U.S. commercial remaining deal value (RDV) grew +145% Y/Y and +20% Q/Q to $2.8 billion.
We’re pointing out those commercial figures because they push back on the increasingly dated view that Palantir was not making as much headway in the space as it was in the public one. While it’s true that U.S. government revenue accounted for 42% of total revenue in the June 2025 quarter, that’s down from 55% in the year-ago quarter. But here’s the thing — it’s not that the U.S. government revenue growth has slowed appreciably, it’s just that Palantir, like ServiceNow NOW and others, is benefiting from AI adoption in the enterprise. Backing that up, after the deal metrics reported by the company:
Q2 2025: Closed 157 deals of at least $1 million, 66 deals of at least $5 million, and 42 deals of at least $10 million.
Q1 2025: Closed 139 deals of at least $1 million, 51 deals of at least $5 million, and 31 deals of at least $10 million.
Q4 2024: Closed 129 deals of at least $1 million, 58 deals of at least $5 million, and 32 deals of at least $10 million.
Q3 2024: Closed 104 deals over $1 million.
Those wins led the company’s remaining performance obligations (RPO), a figure we track closely, to reach $2.4 billion exiting the June quarter with $1.02 billion in short-term RPO and the remaining $1.4 billion in long-term RPO. Those deal wins and RPO led Palantir to guide the current quarter to revenue between $1.083 billion -$1.087 billion vs. the $982 million market consensus. Management also discussed 2025 revenue coming in between $4.142 billion-$4.150 billion, compared to the $3.89 billion consensus. That implies roughly 20% top-line growth in H2 2025 compared to the first half.
But that is only half the story. The other is Palantir continuing to recognize operational leverage that points to adjusted operating margins hitting 47% in H2 2025 compared to 45% in H1 2025 and roughly 37% in H2 2025. That implies we should have 2026’s adjusted operating margin be at least a few points higher than the implied 46% based on Palantir’s guidance. Paired with greater revenue prospects, we should see Wall Street lift its 2026 EPS expectations over the next few days, and with it their price targets.
Helping support our line of thinking, Palantir was very recently awarded a 10-year enterprise agreement with the Army, totaling up to $10 billion, which consolidates 75 contracts into one that spans through 2035. Needless to say, that should do wonders for its RPO figures when it reports the current quarter.
At the time of publication, TheStreet Pro Portfolio was long PLTR and NOW.
