Palantir (PLTR) Stock Is Growing Fast — But Is It Too Expensive to Buy?

TLDR

• Palantir posted Q1 2026 revenue of $1.63 billion, up 85% year-over-year
• U.S. commercial revenue surged 133% to $595 million; U.S. government revenue rose 84% to $687 million
• Full-year revenue guidance raised to $7.65–$7.662 billion, with U.S. commercial growth expected to hit at least 120%
• GAAP operating income hit $754 million, with an adjusted operating margin of 60%
• Wall Street holds a Moderate Buy consensus with an average 12-month price target of $190.85

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Palantir Technologies posted one of the strongest quarters in its history to kick off 2026, with revenue climbing 85% year-over-year to $1.63 billion in Q1.

Palantir Technologies Inc., PLTR

The number that really stands out is U.S. commercial revenue, up 133% to $595 million. That kind of growth rate is rare for a company of Palantir’s size. U.S. government revenue also jumped 84% to $687 million.

Management responded by raising its full-year revenue forecast to between $7.65 billion and $7.662 billion. U.S. commercial revenue alone is expected to grow at least 120% for the full year.

These aren’t projections built on vague AI optimism. Customers are signing contracts and expanding usage at an unusually fast pace.

AIP Is Driving the Growth

The engine behind much of this momentum is Palantir’s Artificial Intelligence Platform, or AIP. It lets organizations plug AI directly into their own data, workflows, and decision-making systems.

A manufacturer might use it to manage supply chains. A hospital could use it for staff allocation. A bank might apply it to fraud detection.

This is not a general-purpose chatbot. It’s AI wired directly into operations — and that makes it hard to rip out once it’s in place.

That stickiness is one of Palantir’s most valuable assets. Once the software is embedded in daily operations, switching costs are high.

Margins Are Turning Heads

The profitability picture is just as impressive as the top-line growth.

GAAP operating income came in at $754 million in Q1, up from $176 million a year earlier. GAAP gross margin reached 87%, and adjusted operating margin hit 60%.

Those numbers put Palantir in rare company among high-growth enterprise software firms.

One area worth watching: stock-based compensation rose 30% to roughly $202 million in the quarter. Palantir is profitable after accounting for that, but ongoing stock awards dilute investors over time.

Government contracts — particularly through its Maven platform used by defense and intelligence agencies — remain a meaningful part of the business. Those deals tend to be large and long-term, but they come with exposure to budget cycles and procurement shifts.

Wall Street is broadly positive. MarketBeat puts the consensus at Moderate Buy across 35 analysts — two Strong Buys, 19 Buys, 11 Holds, and three Sells.

The average 12-month price target is $190.85, with a range running from $90 to $255. That spread says a lot about how divided the street is on valuation.

The business case for Palantir is strong. The debate is entirely about what investors should pay for it.