How Palantir Stock Soared 80% in the First Half of 2025 to Become the Best S&P 500 Stock -- and Why the Next Big Move Could Come in August
Palantir stock's surge in the first half of 2025 was driven largely by strong quarterly earnings reports and increased 2025 guidance.
Palantir stock will often fluctuate on the frequent news updates about wars and other geopolitical conflicts, but long-term investors shouldn't get too caught up in its short-term movements.
Palantir Technologies (NASDAQ: PLTR) stock soared 80.3% in the first half of 2025, which ended on Monday, June 30. That performance made the operator of artificial intelligence (AI)-powered data analytics platforms the best performer in the S&P 500 index.
For context, in the year's first half, the S&P 500 returned 6.2% and the tech-heavy Nasdaq Composite index returned 5.9%.
Palantir stock entered 2025 with strong momentum gaining 10.7% through Feb. 3
Palantir stock had a fantastic year in 2024. It was last year's best-performing stock in the S&P 500 index, skyrocketing an incredible 341%. (Yep, it even beat superstar Nvidia stock, which gained 171%.) The index returned 25% last year.
Palantir stock entered 2025 with momentum stemming from the company's great performance last year, and likely also got a boost from Donald Trump's election as president late last year. (Some influential people with links to Palantir were known to strongly support him.) It gained nearly 11% in early 2025 before the company's release of its Q4 2024 report on Feb. 3. By comparison, the S&P 500 index rose 1.9% over this period.
Palantir stock rocketed 24% on Feb. 4 following the Q4 2024 earnings release
On Feb. 3, Palantir released its report for the fourth quarter of 2024. Shares soared 24% on the following day. The catalysts: the quarter's revenue and earnings along with 2025 guidance were significantly better than Wall Street had been expecting.
In the quarter, Palantir's revenue grew 36% year over year, beating the 28% analysts had been projecting. Adjusted earnings per share (EPS) surged 75%, crushing the 36% consensus estimate. The company's profits have been growing faster than its revenue, reflecting an increasing profit margin.
Investors were also likely buoyed by the U.S. commercial business' terrific revenue growth of 64% year over year. Many investors wanted to see greater diversification away from the company's reliance on governmental business. (For context, in its most recently reported quarter, Q1 2025, Palantir's government/commercial revenue breakdown was 55%/45%.)
Moreover, management guided for 2025 revenue growth of 31% year over year, topping the 26% growth Wall Street was projecting.
Palantir stock dropped on May 6 following the Q1 2025 earnings release, but quickly recouped the decline
On May 6, Palantir stock dropped 12.1% following the company's release on the prior afternoon of its first quarter 2025 report. Within one week, however, shares had more than recouped this decline and closed out May with a gain.
As I wrote in my Q1 earnings article, "It's safe to assume the main reason for the stock's decline was that the quarter's earnings "only" met Wall Street's consensus estimate. Granted, earnings growth was great, but simply meeting analysts' expectations is not usually good enough to prevent a post-earnings decline for a stock with a sky-high valuation."
In Q1, Palantir's revenue jumped 39% year over year, exceeding Wall Street's expectation of 36% growth. Adjusted EPS surged 63%, which was in line with the analyst consensus estimate. As with the prior quarter, the company's profit increased much more than its revenue, reflecting its expanding profit margin.
In addition, management raised its 2025 guidance for several key metrics, including revenue growth, which it increased to 36% from 31%. (Palantir doesn't provide guidance for earnings.)
In June, Palantir stock edged up 3.5% to close out the first half of 2025 with its 80.3% gain.
Catalyst ahead: Earnings release likely coming in early August
Palantir hasn't yet announced a date for the release of its results for the second quarter. However, investors can probably expect a date in early August.
For Q2, management guided for revenue of $934 million to $938 million. This equates to growth of about 38% year over year. It also guided for adjusted income from operations of $401 million to $405 million, or growth of 58% to 60% year over year.
Wall Street is currently modeling for Q2 revenue of $939.3 million, or 39% growth year over year. Analysts also project adjusted EPS of $0.14, or 56% growth.
There are no guarantees, but I'm expecting Palantir to continue its track record of surpassing Wall Street's estimates.
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