Palantir, ServiceNow beat estimates despite share price slumps
Palantir and ServiceNow both delivered quarterly earnings that exceeded Wall Street expectations, signaling robust demand for enterprise AI software despite sharp declines in their share prices.
Palantir and ServiceNow have reported quarterly results that easily surpassed analyst expectations, offering a counter-narrative to recent heavy selling in artificial intelligence equities. Palantir shares have fallen 18% over the past year, while ServiceNow has dropped 51% from its recent peaks.
Palantir’s first-quarter revenue surged 85% to $1.6 billion, with adjusted earnings jumping 154% to $0.33 per share. The firm is benefiting from rising demand among government and commercial clients for AI-infused software that synthesizes large datasets. This demand drove 72 contracts worth at least $5 million and 47 deals exceeding $10 million, pushing total contract value up 61% to $2.4 billion.
Management responded to the commercial momentum by raising 2026 revenue guidance to approximately $7.6 billion. This target represents a 71% year-over-year increase from 2025, underscoring the company's confidence in the scalability of its platforms.
ServiceNow generated nearly $4 billion in second-quarter revenue, a 24% increase that topped the consensus estimate of roughly $3.9 billion. Adjusted earnings of $0.90 per share also beat the $0.86 consensus and grew 11% year-over-year. The company's current remaining performance obligations, a critical indicator of future revenue, climbed 21% to $13.2 billion.
The software giant closed 123 transactions valued over $1 million during the quarter, up 40% from the prior year. The divergence between these operational metrics and the recent stock price trajectories highlights underlying market skepticism about the sustainability of AI-driven software spending. ServiceNow has specifically faced investor fears that AI advancements could render its core workflow management and automation capabilities obsolete.
However, leadership contends that broader AI adoption will actually act as a tailwind for the business. "There's going to be more AI. There are going to be more incidents, and all these things drive increasing volume to ServiceNow," CEO Bill McDermott told CNBC.
The company maintains that organizations will require its infrastructure to manage and troubleshoot their expanding AI operations. For market participants, the quarterly updates suggest that established software incumbents are successfully monetizing the AI transition rather than being displaced by it.
