Palantir Technologies Inc. (PLTR)

Palantir's Artificial Intelligence Platform (AIP), which connects large language models to live operational data within enterprise and government environments, has become the dominant growth engine of the business, and the September 2026 quarter demonstrates that in unambiguous terms. AIP sits atop Palantir's three foundational platforms: Gotham, the intelligence and operations system used primarily by defense and national security clients; Foundry, the enterprise data integration platform deployed across commercial industries; and Apollo, the continuous delivery software that enables both platforms to be updated across air-gapped and classified environments. The Q3 2026 quarter saw total revenue reach $2.31 billion, up 96% year-over-year, with the company's adjusted operating margin at 62% and GAAP operating income crossing $1 billion for the first time. Gross margin on a TTM basis stands at 84.7%, reflecting a business with negligible marginal cost of software delivery once the platform is deployed.

The most consequential shift in Q3 2026 was that U.S. commercial revenue surpassed U.S. government revenue for the first time, reaching $984 million against $953 million from the government side. U.S. commercial revenue grew 148% year-over-year, and total U.S. revenue of $1.9 billion now represents 84% of total company revenue. The average trailing 12-month revenue from Palantir's top 20 customers increased 76% year-over-year to $146 million per customer, indicating both deepening wallet share and platform stickiness within the installed base. Full-year 2026 revenue guidance was raised to approximately $8.53 billion, with adjusted free cash flow guidance set at $4.8 billion to $5 billion.

Palantir's competitive position rests on the difficulty of replicating AIP's integration layer, which connects structured and unstructured data sources directly to model-driven workflows in ways that general-purpose AI cloud offerings from Microsoft, Google, and Amazon do not address natively within classified or sovereign environments. The government business, while temporarily eclipsed by commercial growth in Q3, carries structural advantages in the form of long-term contracts and security clearances that competitors cannot acquire quickly. The primary risk to the margin story is stock-based compensation, which consumed 15.3% of revenue in FY2025 and, while declining as a revenue percentage, remains material enough to create a gap between GAAP and adjusted profitability metrics that sophisticated investors will continue to scrutinize.

Director Alexander D. Moore sold 16,000 shares of Palantir common stock in each of July and September 2026, at prices in the range of approximately $170 to $176 per share, for a combined notional value of approximately $5.4 million to $5.6 million across both transactions. Both sales were executed under pre-arranged trading plans, a common practice for insiders at growth-stage technology companies managing concentrated equity positions. The transactions are modest relative to Palantir's total float and do not, in isolation, signal a directional view on valuation from within the boardroom. They are broadly consistent with the Favorable signal, in that they represent routine position management rather than a material reduction in insider exposure.

Goldman Sachs upgraded Palantir from Neutral to Buy on October 8, 2026, with a price target of $230, and Cantor Fitzgerald raised its price target from $156 to $207 on October 29, 2026 while maintaining a Neutral rating, both actions following a period of accelerating revenue growth and margin expansion. Phillip Securities moved in the opposite direction, downgrading from Buy to Neutral on October 12, 2026 with a target of $215, suggesting some concern that the valuation has caught up with near-term fundamental delivery. The current analyst consensus stands at 27 Buy ratings, 8 Hold, and 3 Sell, with 1 Strong Buy, reflecting broadly constructive sentiment with meaningful holdouts at current price levels. Diluted Earnings Per Share (EPS) for the TTM period stands at $1.53, representing year-over-year growth of 228.6%, a result that has driven upward revisions to forward estimates. At a TTM P/E of approximately 116.6x on a diluted basis, the market is embedding sustained multi-year EPS compounding well above 30% into the forward price, a rate that the most recent quarters have been exceeding, but which demands continued delivery to hold at current multiples. Forward estimate revisions following the September 2026 quarter are being monitored.

Palantir returned $75 million to shareholders via share repurchases in FY2025, up from $64 million in FY2024, a directional increase but one that represents less than 0.1% of the current market capitalization and has had no material effect on the diluted share count, which has expanded from approximately 2.30 billion weighted average diluted shares in FY2023 to approximately 2.57 billion in FY2025. The share count expansion is driven by ongoing stock-based compensation grants that outpace the pace of buybacks, a dynamic that creates a persistent, modest dilution headwind for per-share metrics even as absolute earnings grow rapidly. The buyback yield is effectively zero, and Palantir pays no dividend, making total capital return yield negligible at current prices. Free cash flow for the TTM period stands at $4.1 billion, comfortably covering the minimal capital return program, with the gap between FCF generation and shareholder distributions widening as earnings have accelerated. Capital expenditure was $33.9 million in FY2025, representing 0.76% of revenue, rising modestly from $12.6 million or 0.44% of revenue in FY2024, as the company invests in infrastructure to support AIP deployments. Management raised adjusted free cash flow guidance for full-year 2026 to $4.8 billion to $5.0 billion, up from the prior implied range, reflecting continued operating leverage. Palantir does not carry a public credit rating from Moody's or S&P.