Palantir (PLTR) reported its June quarter after the close on Monday, August 3, and the numbers were the strongest in its history by almost any measure. Revenue grew 93% year over year. The Rule of 40 score — revenue growth plus adjusted operating margin — reached 155%. Alex Karp called the quarter "otherworldly," which for once was not much of a stretch. The stock closed that session at $125.65 and traded roughly 15% higher into the next morning, near $144.
MoatScan re-ran its full PLTR analysis on August 4, after the report. The moat rating did not move. It still reads 60/100, Narrow Moat. That is not an oversight, and this article is mostly about why.
What Palantir reported
Revenue was $1.935 billion, up 93% year over year and 19% sequentially — the fastest growth rate Palantir has ever posted, against consensus near $1.81 billion. GAAP and adjusted diluted EPS both came in at $0.41 versus roughly $0.35 expected.
The US drove it — total US revenue of $1.573 billion, up 115%:
- US commercial: $764 million, up 149%
- US government: $809 million, up 90%
Profitability moved with it: GAAP operating income of $912 million (47% margin), adjusted operating income of $1.194 billion (62%), GAAP net income of $1.062 billion (55%), and adjusted free cash flow of $1.220 billion (63%). Palantir finished with $9.2 billion in cash and short-term treasuries.
Total contract value booked reached $3.373 billion, up 49%, with US commercial TCV at $2.132 billion, up 153%. US commercial remaining deal value — signed work not yet recognized as revenue — stands at $6.238 billion, up 124% year over year and 27% in the quarter alone. Deals closed: 220 above $1 million, 73 above $10 million.
Guidance rose too: Q3 revenue of $2.160–2.164 billion, and a raised full-year range of $8.150–8.158 billion, about 82% growth, with US commercial above $3.424 billion (at least 134%) and adjusted free cash flow of $4.5–4.7 billion.
What actually moved the stock
Not the EPS beat. Six cents on a $125 stock is not what re-rates a company.
Three things did. The raise — guiding a full year to roughly 82% growth is a statement about the next two quarters, not the last one, and unusual at this revenue scale. US commercial — 149% growth, guided to at least 134% for the year, answers a long-standing question about whether the business outside government could carry the company. Cash — a $4.5–4.7 billion free cash flow guide means the growth is not being bought with burn.
A growth rate can be a comparison artefact. $6.238 billion of signed, unrecognized US commercial work is not.
What the quarter says about the moat
Here is the part the headline does not change. A quarter this good does not upgrade the moat rating.
The moat score measures structural protection — how much of the profit stream is defended by something a competitor cannot copy — not how fast the business is growing. A company can be exceptional at one and ordinary at the other. As of the August 4, 2026 re-run, PLTR reads 60/100, Narrow Moat, with a Positive trend and a Strong management verdict — Karp has been founder-CEO since 2004, and reported ROIC is around 67%.
Two pillars are genuinely confirmed by this quarter.
Switching Costs, 7.5/10 — our analysis labels it "Embedded Mission Workflows." US commercial remaining deal value up 124% to $6.24 billion, and 73 deals above $10 million, are customers pre-committing multi-year operational workflows to one vendor. Switching costs are at their most literal when a customer signs years of work in advance.
Intangible Assets, 7.0/10 — "Trusted Sensitive-Data Brand." Clearances, accreditation, and a record of missions the software already runs are not things a rival buys past inside one procurement cycle.
The two pillars keeping the rating Narrow are untouched by the quarter.
Network Effects, 4.5/10 — "Limited Ecosystem Reinforcement." Each customer generally runs inside its own isolated data environment. A new agency deploying Palantir makes the product no more valuable to a bank that deployed it last year, so value does not compound across the user base the way network effects require, and multi-homing with rival analytics vendors is common.
Cost Advantages, 5.0/10 — "Value Over Low Cost." Forward-deployed engineering is labour-intensive and customized per account. Palantir competes on the value it creates inside a customer, not on a cheaper cost structure.
Efficient Scale sits between them at 6.0, "Niche Monopoly Traits." The gap between the top two pillars and the bottom two is the whole distance between Narrow and Wide.
The AI read points the same way: Opportunity 6, Threat 7 — a net of −1. Our assessment locates the durable advantage in secure deployment and operational integration rather than foundation-model IP, and the risk in hyperscalers and frontier-model vendors pushing that integration layer down until it is commodity software — the two-sided dynamic in How AI Is Reshaping Economic Moats. Amazon reported days earlier with its own record quarter and also stayed Narrow.
The valuation, and the assumption doing all the work
This is the uncomfortable part, so it is better stated plainly than buried.
As of the same August 4, 2026 analysis, Palantir carries a Financial Score of 80/100 — Income Statement 8.0, Balance Sheet 8.5, Cash Flow 8.0, Key Ratios 7.5, Growth 8.0. The balance sheet earns its 8.5: roughly $229 million of debt against about $8.0 billion of cash and short-term investments.
The DCF lands at a fair value of $31.20 against the $125.65 close — a margin of safety of −75.2%, and an Overvalued verdict issued one day after a blowout quarter.
The assumption doing nearly all of that work is the growth rate. The model compounds revenue at 12.0% over ten years, discounted at an 8.1% WACC to a 4.0% terminal growth rate, with a 36.1% EBITDA margin and capital expenditure at 1% of revenue. Palantir just printed 93% and guided the year to about 82%. The statement data underneath the model runs through the twelve months ended March 31, 2026 — trailing revenue of $5,224 million. The June quarter is not in it. The price anchor is the $125.65 close, so at roughly $144 the gap is wider still.
So be explicit: if Palantir compounds anywhere close to its own guidance, our model is wrong. A 12% ten-year CAGR applied to a company currently growing at seven times that rate is not a subtle input.
The opposite case is worth stating just as plainly. At roughly 40 times forward revenue on the raised guide, and a forward P/E above 100, the market is paying today for a decade of that compounding arriving, with little allowance for a slowdown. Neither position is free, and a reader is entitled to hold both. The 27 analysts on our page sit between them: a $200 median against a $70 low and a $255 high.
One more honest line: stock-based compensation ran about $730 million over the trailing twelve months — a meaningful part of the cost of running the business settled in shares rather than cash, and a real cost to existing holders. How the model is chosen is set out in our methodology.
The scorecard
What this quarter settled: the demand is real, and it is arriving as contracted revenue rather than as pipeline commentary.
What stays open: whether growth of this order persists long enough to justify the multiple, and whether the integration layer Palantir occupies stays defensible as model vendors and cloud platforms move down into it. The first is a valuation question, the second a moat question, and August 3 answered neither.
Everything quoted here — the pillar breakdown, the financial sections, the DCF and its assumptions — is live on MoatScan's PLTR analysis; this article deliberately freezes the August 4, 2026 snapshot. For how Palantir sits against similarly-rated companies, see the narrow moat stocks list; for names our DCF reads as trading below fair value, the undervalued screen. As always: this is analysis of a company, not a recommendation to buy or sell its stock.