Jim Cramer's bullish call on Palantir (NASDAQ: PLTR) has quickly turned into a contrarian signal.
US commercial revenue surged 93% year-over-year in Q2 2025, proving Palantir's AI adoption is scaling structurally, not episodically. A $10 billion, 10-year U.S. Army contract cements government work as a stable and defensible long-term revenue base. The company generates FCF margins above 50%, validating an asset-light model that compounds growth without heavy infrastructure spending.
Palantir (PLTR) shares tumbled Tuesday afternoon, extending recent losses as a high-profile short seller fueled worries the stock could be overvalued after a strong run earlier this year.
Major U.S. equities indexes were mixed Tuesday as tech sector losses weighed on their performance. The S&P 500 ended the session 0.6% lower, while the tech-heavy Nasdaq dropped 1.5%.
The company's latest earnings report shows a company that's been hitting on all cylinders for quite some time. In the last three years, Palantir has delivered:
Palantir's stock fell for a fifth-straight day after touching new highs earlier this month. The artificial intelligence software provider had a stellar earnings report earlier this month, reporting its first-ever $1 billion revenue quarter.
Palantir (PLTR) shares tumbled Tuesday afternoon, extending recent losses as a high-profile short seller fueled worries the stock could be overvalued after a strong run earlier this year.
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Palantir's $420B valuation, soaring 130% this year, tests limits with sky-high multiples and lofty performance expectations.
Palantir's Q2 results show accelerating growth and margins, making its high valuation more justifiable based on both narrative and cash flow potential. The company excels by the Rule of 40, with a 94% score and raised guidance suggesting over 50% YoY growth for the full year. But Palantir's reliance on sensitive data could limit its total addressable market. Not just for government contracts but also commercial revenues.
Tuesday marks the fifth consecutive trading day shares have dropped.
Andrew Left argues that investors have overhyped Palantir stock, and its valuation pales in comparison to a true AI leader like OpenAI.