The Critical Thing to Watch in Palantir's February Earnings: Revenue Momentum

Palantir Technologies (NASDAQ: PLTR) delivered an impressive performance in 2025, with its stock surging 135% despite market skeptics and outpacing most artificial intelligence stocks. As the company released its earnings report on Feb. 2, there’s one thing investors shouldn’t miss when evaluating what comes next for this data analytics powerhouse.

Thing 1: The Accelerating Revenue Engine Powering PLTR’s Rise

The primary driver behind Palantir’s remarkable stock appreciation is its increasingly aggressive growth trajectory. Unlike typical AI companies that build consumer-facing applications, Palantir takes a distinctive approach by embedding its technology directly into enterprise data systems. It specializes in data organization and advanced analytics for large corporations, governments, and military institutions—securing lengthy contracts that generate predictable, multi-year revenue streams.

Since launching its public offering in 2020, Palantir has recently reached a critical scale inflection point. This shift is evident in its financial metrics:

The trajectory reveals something striking: each quarter showed measurably stronger year-over-year growth compared to the previous period. Paired with expanding profit margins, this demonstrates the company is achieving efficiency gains even while investing heavily for future expansion. The February earnings report needed to clarify whether this acceleration would persist or whether the company had reached a plateau in its growth trajectory. This distinction became the pivotal question for investors evaluating PLTR’s future potential.

Understanding the Valuation Challenge

The stock’s astronomical valuation—trading at 416 times trailing twelve-month earnings at the time of analysis—reflects market confidence in these growth narratives. Such premium multiples are typically reserved for companies demonstrating exceptional and sustained expansion rates. Palantir’s ability to maintain above-50% year-over-year growth, particularly as it scales into larger market segments, justifies paying closer attention to whether earnings growth continues its upward momentum.

Thing 2: The Key Question for Long-Term Investors

For those contemplating a position in Palantir Technologies, consider this perspective: Leading investment research firms have identified what they believe are superior opportunities among emerging growth stocks. While Palantir has impressed many, other selections have historically delivered outsized returns. Historical examples from professional recommendation lists illustrate the point—Netflix appeared on top-10 lists in December 2004, and a $1,000 investment at that time would have grown to $462,174. Similarly, Nvidia made such lists in April 2005, with a comparable $1,000 investment reaching $1,143,099.

These historical precedents highlight why growth trajectory matters more than current momentum alone. Professional stock recommendation services have maintained an average return of 946% versus the S&P 500’s 196%, demonstrating the value of rigorous stock selection frameworks beyond popular sentiment.

The earnings data released on Feb. 2 thus served as a critical checkpoint: Did revenue growth continue accelerating, or has Palantir’s expansion finally begun moderating? Sustained acceleration at these scale levels would support the premium valuation. Any slowdown would raise questions about whether the market has overestimated the company’s long-term potential. This distinction remained the most consequential metric for investors making allocation decisions.

Stock Advisor returns as of January 27, 2026. Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. Disclosure policies available upon request. The views expressed herein are those of the author and do not necessarily reflect those of NASDAQ, Inc.