DENVER — Palantir Technologies paid $15.4 million of income tax in the three months to June 30. It earned $1.08 billion before tax over the same period. The rate works out at 1.4 per cent, and it is the least examined number attached to a stock that has risen more than 43 per cent in a month.
The shield is old failure. Between 2018 and 2022 Palantir lost $3.22 billion, and American tax law lets a company carry those losses forward against later profit. The years when Palantir was a cautionary tale about unprofitable software are now the years underwriting its margins.
Palantir fell 1.93 per cent to $176.47 on Monday afternoon in New York, one of the few large software names to give ground in a session that punished anything making chips and rewarded almost everything running on them. The shares sit 15 per cent below their 52-week high of $207.52 and about 66 per cent above the low.
That divergence is the story of the month, and it is not the story most of the coverage is telling.
PLTR Stock Today: Software Is Quietly Winning the AI Trade
Look past Monday’s single session and the rotation is unmistakable. Over the past month Palantir has gained 43.6 per cent, ServiceNow 30.3, Salesforce 28.5, Microsoft 28.0, Oracle 24.5 and Snowflake 20.7. The PHLX Semiconductor Index has fallen 3.2 per cent over the same stretch, and the Nasdaq 100, which contains both groups, is up only 3.3.
Money has moved from the companies building artificial intelligence to the companies charging for it. Palantir is the purest available expression of that trade, which is also why it is the most exposed if the trade reverses.
| Instrument | Price | Session | 1 month | Below 52-week high |
|---|---|---|---|---|
| Palantir Technologies (PLTR) | $176.47 | -1.93% | +43.6% | -15.0% |
| ServiceNow (NOW) | $128.70 | +0.17% | +30.3% | -33.9% |
| Salesforce (CRM) | $210.24 | +0.51% | +28.5% | -21.9% |
| Microsoft (MSFT) | $488.70 | +1.13% | +28.0% | -11.7% |
| Oracle (ORCL) | $143.22 | -2.22% | +24.5% | -58.6% |
| Snowflake (SNOW) | $323.64 | -2.75% | +20.7% | -5.4% |
| iShares Expanded Tech-Software ETF (IGV) | $102.81 | -0.54% | +16.9% | -12.9% |
| PHLX Semiconductor Index (SOX) | 11,445.42 | -2.51% | -3.2% | -21.9% |
| Nasdaq 100 (NDX) | 29,064.11 | -0.84% | +3.3% | -5.5% |
| Live intraday quotes, not settlements. The one-month column measures the change from the close one month earlier. Distance from the 52-week high is Eastern Herald’s calculation from the quoted price. | ||||
The Tax Rate Nobody Is Pricing
Palantir’s June quarter, filed with the Securities and Exchange Commission on August 4, showed revenue of $1.94 billion, up 92.8 per cent from $1.00 billion a year earlier. Operating income was $912.0 million, an operating margin of 47.1 per cent, which on its own would place Palantir among the most profitable software companies of its size anywhere.
Net income was $1.06 billion. That is a net margin of 54.9 per cent, higher than the operating margin, which is unusual enough to be worth stopping on. It happens when every line below operating income adds instead of subtracting: $77.5 million of interest earned on the cash pile, roughly $88 million of other income, and a tax charge of $15.4 million against $1.08 billion of pre-tax profit.
| Line item | Q2 2026 ($m) | Share of revenue |
|---|---|---|
| Revenue | 1,935.5 | 100.0% |
| Operating income | 912.0 | 47.1% |
| Interest income | 77.5 | 4.0% |
| Other income, net | 87.8 | 4.5% |
| Pre-tax income | 1,077.3 | 55.7% |
| Income tax expense | 15.4 | 0.8% |
| Net income | 1,061.9 | 54.9% |
| Effective tax rate 1.43 per cent. The other income line is the residual between reported pre-tax income and the sum of operating income and interest income, so it is Eastern Herald’s derivation rather than a line Palantir labels. | ||
On 2,568,694,000 diluted shares the quarter produced GAAP earnings of $0.41. At $176.47 the market is capitalising that run rate at roughly 107 times, and about 74 times the $6.16 billion of revenue Palantir has booked over the past twelve months. Those multiples rest on an earnings figure that a near-zero tax rate is holding up.
Palantir Has Written Off 98.6 Per Cent of Its Own Tax Assets
Here the story turns against the simple version. In its annual report for 2025, filed in February, Palantir disclosed gross deferred tax assets of $3.50 billion, of which $2.62 billion arose from operating loss carryforwards accumulated in the loss-making years. Against that $3.50 billion the company recorded a valuation allowance of $3.45 billion.
A valuation allowance is an accounting statement that a company believes it is more likely than not that it will be unable to use an asset. Palantir has applied one to 98.6 per cent of its deferred tax assets. It did so covering a year in which it earned $1.63 billion of net income.
Both positions cannot hold indefinitely. Either the allowance is stale, in which case releasing it would deliver a one-off gain large enough to distort a quarter and flatter a year, or something structural genuinely limits how much of the carryforward Palantir can apply, in which case the effective rate climbs toward statutory sooner than the current run rate suggests. Either outcome moves the earnings these shares are priced against. Neither appears in the multiples being quoted around this stock.
Eight Years of Revenue, Five of Them Losses
The arc is worth seeing whole, because the tax position is a direct consequence of it. Palantir booked $595 million of revenue in 2018 and lost $580 million. It lost money again in 2019, again in 2020 on a scale beyond a billion dollars, and again in 2021 and 2022. The first annual profit came in 2023, at $210 million. By 2025 revenue had reached $4.48 billion and net income $1.63 billion.
| Year | Revenue ($m) | Net income / (loss) ($m) |
|---|---|---|
| 2018 | 595.4 | (580.0) |
| 2019 | 742.6 | (579.6) |
| 2020 | 1,092.7 | (1,166.4) |
| 2021 | 1,541.9 | (520.4) |
| 2022 | 1,905.9 | (373.7) |
| 2023 | 2,225.0 | 209.8 |
| 2024 | 2,865.5 | 462.2 |
| 2025 | 4,475.4 | 1,625.0 |
| Figures as reported on a GAAP basis. Cumulative losses across 2018 to 2022 total $3.22 billion, which is the origin of the carryforwards now shielding Palantir’s profit. | ||
Growth of that shape is why the government business matters as much as the commercial one. The Army awarded Palantir an enterprise service agreement in 2025 worth up to $10 billion over a decade, folding roughly 75 separate contracts into a single vehicle, according to the Army’s own announcement of the award. Palantir does not break out how much of that ceiling has been drawn.
Why Monday Sold Palantir Anyway
The session was a rotation with a momentum tax attached. Names that had run hardest gave back the most, and Palantir had run hardest of all. Our Nasdaq column for the session found the median large Nasdaq company barely moved while the cap-weighted index fell, and the damage concentrated in hardware: Nvidia fell about 2.5 per cent and AMD fell with the rest of the semiconductor complex.
Palantir is not a hardware company and carries no memory-price exposure, which is precisely why it has been bid. It also carries no capital spending burden of the kind Microsoft is defending at $41 billion a quarter. A software company with a 47 per cent operating margin and no fabrication plants to build is the cleanest way to own the theme, and clean ways to own a theme get crowded. The broad market barely moved while that reshuffling went on underneath it.
What This Column Cannot Tell You Yet
We do not know when, or whether, the valuation allowance releases. Palantir restates it annually rather than quarterly, so the next authoritative reading is months away, and the company has not said publicly what would trigger a change. Until it does, the single largest swing factor in Palantir’s reported earnings sits outside everyone’s model, including ours.
We also cannot say how much of the $10 billion Army ceiling has actually converted into revenue, because Palantir reports government revenue in aggregate rather than by contract vehicle. A ceiling is permission to spend, not a commitment to spend, and the distance between those two things is the distance between the growth rate this stock is priced for and the one it might get.
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