Alex Karp Believes Palantir’s Latest Quarterly Performance Was ‘Otherworldly’ — Deutsche Bank Turns Bullish, But Jefferies Says 'The Setup Gets Harder'

• Deutsche Bank said in its note that Palantir is “operating several steps ahead” of the broader software sector in translating AI demand into tangible customer value.
• The firm also argued that the post-earnings setup makes the stock’s valuation appear “even more reasonable,” saying current levels fail to fully reflect Palantir’s “unparalleled Rule of 155 profile.”
• Jefferies warned that the “setup gets harder from here” for Palantir as comparisons become significantly tougher over the coming quarters.

Shares of Palantir Technologies Inc. (PLTR) soared more than 17% in Tuesday’s pre-market trade following the company’s blowout second-quarter (Q2) results, prompting the analysts at Deutsche Bank to upgrade the stock.

According to TheFly, Deutsche Bank upgraded Palantir to ‘Buy’ from ‘Hold’ while keeping its $200 price target unchanged, implying an upside potential of about 59% from Monday’s closing price.

Palantir CEO Alex Karp termed the company’s Q2 performance “otherworldly,” saying the company’s “Rule of 40 score climbed to 155.”

PLTR was the top trending ticker on Stocktwits at the time of writing.

Deutsche Bank Says PLTR Valuation ‘Even More Reasonable’ Post Q2 Results

Deutsche Bank said in its note that Palantir is “operating several steps ahead” of the broader software sector in translating AI demand into tangible customer value.

The firm also argued that the post-earnings setup makes the stock’s valuation appear “even more reasonable,” saying current levels fail to fully reflect Palantir’s “unparalleled Rule of 155 profile” and its durable opportunity to dominate enterprise AI deployments.

Why Jefferies Is Still Cautious On PLTR

Jefferies raised its price target on PLTR to $80 from $70 but maintained an ‘Underperform’ rating, acknowledging another strong quarter as U.S. business revenue climbed 115% year-on-year.

However, the firm warned that the “setup gets harder from here” for Palantir as comparisons become significantly tougher over the coming quarters, with growth rates set against much stronger prior-year numbers, while international expansion continues to moderate.

Jefferies said it remains a “fundamental fan” of Palantir but believes the risk-reward is more attractive in other AI winners.

Morningstar Says PLTR Has Little Margin For Error

Morningstar assigned a fair value estimate of $153 on Palantir shares, saying the company continues to boast the strongest combination of growth and profitability in its software coverage universe.

The firm said Palantir’s results demonstrated “strength from factory floor to foxhole” and reinforced its view that the software firm’s business thesis continues to strengthen.

At the same time, Morningstar cautioned that “high expectations are embedded” in the stock and that there is “little margin for error.” The firm added that it believes the current share price is adequately capturing the company's long-term prospects.

Palantir’s Q2 At A Glance

Palantir reported earnings per share (EPS) of $0.41 on revenue of $1.94 billion in Q2, beating Wall Street estimates of an EPS of $0.35 on revenue of $1.81 billion, according to Fiscal.ai data.

“Demand for AI sovereignty has now been unleashed. And Palantir is the only company that has demonstrated it can transform tokens into actual economic value,” said Karp.

The company forecast revenue in the range of $2.16 billion and $2.164 billion, ahead of a consensus estimate of $2 billion. For the full year 2026, Palantir sees revenue in the range of $8.15 billion and $8.158 billion, beating an estimated $7.72 billion.

Palantir’s U.S. commercial revenue in Q2 soared 149% year-on-year, while government revenue grew 90% YoY. During the quarter, the company closed $3.373 billion of total contract value.

What Retail Traders Think Of PLTR Stock

Retail sentiment on Stocktwits around Palantir was in the ‘extremely bullish’ territory, with message volumes at ‘extremely high’ levels.

PLTR stock is down 29% year-to-date and 19% over the past 12 months. The S&P 500 ETF (SPY) is up 22% over the past 12 months, while the Invesco QQQ Trust (QQQ) is up 26%.

The Vanguard Morningstar Total Stock Market ETF (VTI) is up 22% during this period, while the Vanguard Morningstar Growth ETF (VUG) is up 17%.

Also See: AMD Q2 Earnings Preview: Wall Street Is Watching AMD's Server CPU Push As Lisa Su Eyes A $220B Market

For updates and corrections, email newsroom[at]stocktwits[dot]com.