Palantir in the AI stack

The business and what the filings show

Palantir sells data integration and AI platforms to governments and companies. Over its latest four quarters it reported $6.2B of revenue, +79%, at an 85% gross margin and a 43% operating margin, which makes it one of the few software companies whose numbers show AI as a clear accelerant.

In the stack, Palantir sits in the return layer: it is one of the companies that has to turn AI spending into revenue from end customers. Its growth is the counterexample to the broader software group, which has grown steadily rather than dramatically. Remaining performance obligations were $4.9B.

Palantir’s results show what it looks like when AI is making software more valuable to buyers. The questions are how durable the growth is across its government and commercial customers, and how much of the revenue is production use rather than pilots, the distinction the book calls revenue quality.

How AI shows up in the numbers

Palantir’s AI exposure is its platforms for deploying AI on customers’ own data, sold to governments and companies. Unlike most of the stack, its revenue is a direct measure of customers paying for AI applications, which is why its numbers matter beyond Palantir itself: they are evidence on whether the return side of the AI build-out is arriving.

For scale, Palantir’s revenue over the latest four quarters equals 1% of the $566B the five largest buyers spent on capital projects over their latest four quarters. Their capex rose +81% on the year before, while Palantir’s revenue grew +79%: slower than the spending, so it is capturing a smaller share of each new capex dollar, or more of its business sits outside the build-out.

How it talks about AI

In its latest earnings release, furnished to the SEC on August 3, 2026, Palantir mentioned AI 3 times in 1,110 words of narrative text, about 2.7 mentions per 1,000 words. Of its 3 sentences about AI, 0 included a number: a revenue figure, a growth rate, a customer count or another measurable result. Across the 8 releases we read, back to November 4, 2024, AI mentions per 1,000 words went from 4.5 to 2.7.

Specific claims are easier to check against the numbers than general enthusiasm, which is why the share of AI sentences that carry a figure is worth watching alongside how often AI is mentioned. The sentences below are quoted from the release as published, after removing safe-harbor text and company boilerplate.

• “Demand for AI sovereignty has now been unleashed.”
• “The sovereign AI revolution makes us very optimistic about the future," said Alex Karp, Co-Founder and Chief Executive Officer of Palantir Technologies.”

Source: earnings release (Form 8-K, Exhibit 99.1), August 3, 2026.

The trend in the numbers

Since the start of 2023, Palantir’s largest quarter by revenue was Q2 2026 at $1.9B, and its highest gross margin was 87% in Q1 2026. The latest quarter set the revenue record for the period.

Quarter by quarter, Palantir’s revenue grew +63% in Q3 2025, +70% in Q4 2025, +85% in Q1 2026, +93% in Q2 2026 on the same quarter a year earlier. Growth has been accelerating.

Gross margin in the latest quarter was 85%, against 81% a year earlier, so it is keeping more of each dollar as it grows. Operating margin moved from 27% to 47% over the same span. Over the latest four quarters it turned 55% of its revenue into operating cash flow and spent 1% of revenue on capital projects, against 1% a year earlier.

Where it sits in the stack

Palantir sits in the software and applications layer of the AI stack. It sits at the top of the stack, where revenue from end customers has to come from; its own spending flows to AI clouds.

Among the 27 companies in this layer on our map, it ranks number 10 by revenue and first of 27 by revenue growth. Its gross margin of 85% compares with 78% for the layer as a whole, a sign that it keeps more of each dollar than its neighbors. The full layer analysis is on the software page.

Latest four quarters for 10-Q filers; latest fiscal year for 20-F filers. Companies under $100 million of revenue are left out.

Against the 27 US-listed companies in its layer, Palantir grew +79% over the latest year versus +19% for the layer combined, and converted 55% of revenue into free cash flow versus 33% for the layer. It is taking share of the layer’s revenue.

What has to go right, and what could go wrong

What has to go right. Commercial customers have to keep expanding from pilots to production deployments, sustaining growth as Palantir gets larger, while government demand stays robust.

What could go wrong. Growth this fast is hard to sustain; a slowdown in new commercial deployments, or a shift in government budgets, would show in revenue growth and in its backlog.

These describe the conditions the business depends on, as the filings show them. They are not a view on the stock.

Through the lens of Investing in AI

Rob May’s book offers six mental models for telling AI moats from traps. The one most useful for Palantir’s layer is “AI challenges traditional SaaS assumptions”: Per-seat pricing, zero marginal cost, smooth ARR curves, and automatic land-and-expand break down when software does work on your behalf. The mistake is not using SaaS instincts. It is using them automatically.

The question it asks of any company is: What work is this product actually doing, and how does pricing map to it? Applied to Palantir, the filings on this page are the place to start: the margin trend shows whether it holds scarce value or passes it through, the customer and financing disclosures show who it depends on, and the commitments show what it has promised before the revenue arrives.

Customers and concentration

US companies must disclose any customer that accounts for 10% or more of revenue, and foreign filers usually describe their largest customers. Concentration matters because a company’s growth is only as durable as the handful of buyers behind it, and in the AI stack those buyers are often the same few companies.

• We have not found a customer-concentration statement in Palantir’s latest filings that our reader can quote cleanly; see its filings on SEC EDGAR.

Commitments and backlog

• Backlog. Palantir reports $4.9B of remaining performance obligations, 0.8 times its revenue over the latest four quarters: contracted revenue not yet earned.

What to watch

Palantir’s next quarterly report will cover the quarter ending around September 29, 2026. Large companies must file a 10-Q within 40 days of a quarter’s end and a 10-K within 60 days of the fiscal year’s end, so the new figures should arrive by about November 28, 2026 at the latest. This page, the layer pages and the next quarterly report all update from that filing.

• Commercial versus government revenue growth, which shows how broadly AI deployments are spreading.
• Operating margin as it scales, the test of whether growth stays profitable.
• Remaining performance obligations, a read on how much future revenue is already contracted.
• Its place in the next quarterly AI Stack Report, which updates every company on the map from the new filings.

Figures from Palantir’s SEC filings, latest period ended June 30, 2026. Other companies: all company pages.