Palantir's AI Momentum Continues. Can It Keep Going, or Is It Too Late to Buy the Stock?

• Palantir continues to see revenue growth accelerate.

• The growth is being led by U.S. commercial customers, which are rapidly adopting its Artificial Intelligence Platform (AIP).

• The stock is not cheap, but its long-term opportunity remains enormous.

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With high valuation comes high expectations, but Palantir Technologies (NASDAQ: PLTR) recently once again showed why it's one of the preeminent artificial intelligence (AI) growth stocks in the world. The stock jumped on the back of its strong second-quarter results, reported Aug. 4, and is up 575% over the 12 months ended Aug. 6.

With such a strong performance, investors may be wondering if the momentum can continue, or if it is too late to buy the stock. Let's take a closer look at its Q2 results and prospects to find out.

For the eighth straight quarter, Palantir saw its quarterly revenue growth accelerate. During this period,year-over-year growth went from 13% in 2023's Q2 to 48% last quarter. Meanwhile, its Q2 revenue of $1 billion easily topped management's forecast of $934 million to $938 million.

Data source: Palantir.

Palantir's growth continues to be led by U.S. commercial customers adopting its Artificial Intelligence Platform (AIP). The company once again credited AIP's ontology, saying it is "pure understanding," and that without it, large language models (LLMs) cannot actually work in the real world

The company said it is seeing new commercial customers now begin using AIP with higher initial ambitions, while existing customers are starting to expand more quickly. It once again highlighted various use cases, from Fannie Mae using AIP to uncover mortgage fraud to automotive seating and electrical system company Lear using its platform for various tasks, such as proactively managing its tariff exposure, automating administrative workflows, and dynamically balancing its manufacturing lines.

As a result, U.S. commercial revenue surged 93% to $306 million in the quarter. Meanwhile, its U.S. commercial remaining deal value -- which refers to revenue it will recognize in the future from contracts already signed -- soared 145% to $2.79 billion. U.S. commercial customer count climbed 64% year over year, or 12% sequentially, to 485.

On the government side of its business, revenue jumped 49% year over year to $553 million. U.S. government revenue soared 53% to $426 million. The company said it was winning business across civil, intel, and defense contracts. It highlighted a recent $10 billion, 10-year contract with the U.S. Army that consolidated 75 contracts into one.