Palantir Technologies (PLTR) stock has been on an impressive run, with its stock hitting a new 52-week high above $137 in morning trading on June 11. Despite ongoing macroeconomic uncertainties, the company has shown resilience, and its shares have trended higher, emerging as the best-performing stock in the S&P 500 Index ($SPX) so far this year.

Year-to-date, Palantir stock has surged 77.1%, and its gains over the past year and two years have been even more impressive, up 461.4% and 791.5%, respectively.

Given this massive growth, Palantir stock trades at a price-sales multiple of 108.76x, which is significantly higher than industry averages. This raises concerns about whether the upward momentum in PLTR stock will sustain.

Strong Fundamentals Support PLTR’s Rally

Palantir’s meteoric is rooted in its improving fundamentals. The company delivered an exceptional first quarter in 2025, reporting growth across key metrics. The quarterly revenue growth rate once again accelerated, led by its ability to capitalize on the growing demand for AI solutions.

Palantir’s Q1 revenue jumped 39% year-over-year to $884 million. The company also surpassed a $1 billion annual revenue run rate in its U.S. commercial business. Much of this growth is driven by its Artificial Intelligence Platform (AIP), which continues to see robust demand across commercial and government sectors.

In the U.S., total revenue jumped 55% year-over-year and 13% sequentially. The government segment alone posted 45% year-over-year growth, powered by defense and intelligence contracts.

Palantir’s Commercial Strength and Bookings Momentum

Palantir’s U.S. commercial segment has become a key driver of growth. In Q1, commercial revenue reached $397 million, up 33% from the previous year. U.S. commercial revenue surged 71% year-over-year to $255 million, and bookings soared 183% to $810 million, its strongest quarter ever for commercial Total Contract Value (TCV) in the U.S.

On a trailing 12-month basis, commercial TCV bookings crossed $2 billion, highlighting ongoing enterprise adoption of AI-driven solutions.

The customer count has grown sharply. Palantir serves 769 clients, up 39% year-over-year. Revenue concentration is also healthy, with the average trailing 12-month revenue per top-20 customer growing 26% to $70 million.

Government and International Segments Remain Resilient

Palantir’s government revenue remains highly resilient. U.S. government revenue climbed 45% year-over-year to $373 million. In comparison, international government revenue also rose 45%, driven by engagements in the United Kingdom’s healthcare and defense sectors and a newly announced NATO partnership. In total, Palantir booked $1.5 billion in government TCV in the quarter, up 66% from the previous year.

International commercial revenue dipped 5% year-over-year in Q1 to $141 million, reflecting some turbulence in European markets and a difficult comparison against a strong Q4 2024. Still, Palantir continues to expand in regions like Asia and the Middle East, positioning itself for future growth.

Palantir’s Guidance Shows Solid Momentum in Business  

Given the strong start to the year, Palantir raised its full-year guidance. The company now expects revenue between $3.89 billion and $3.902 billion in 2025, reflecting 36% year-over-year growth. The U.S. commercial revenue is expected to exceed $1.178 billion, representing at least a 68% increase from last year. Adjusted income from operations is projected to land between $1.711 billion and $1.723 billion, while free cash flow is expected to fall between $1.6 billion and $1.8 billion.

As for Q2 2025, revenue is forecast between $934 million and $938 million. This reflects a sequential improvement and a year-over-year growth rate of over 38%.

Looking Ahead: Can the Momentum Continue in PLTR Stock?

With Palantir’s business firing on all cylinders with commercial adoption soaring, government contracts expanding, and financial performance improving, the bullish case remains strong heading into the second half of 2025.

While valuation is rich after such a significant run, which keeps analysts sidelined, investor sentiment remains upbeat, particularly given the ongoing AI boom and Palantir’s unique positioning as both a commercial and defense AI software leader.

As AI becomes increasingly integrated into critical decision-making across industries, Palantir’s dual strength in commercial enterprise software and mission-critical government systems could continue to provide long-term tailwinds.