To The Moon

Illustrative forecast assuming Palantir sustains a Rule of 40 score of 155% for the next four quarters (Q3 2026 through Q2 2027).

Key Q2 2026 baseline

Revenue: $1.935 billion (+93% year-over-year).  

Adjusted operating margin: 62%.  

Rule of 40: 155% (93% growth + 62% margin).  

Adjusted EPS: $0.41.  

Diluted shares: roughly 2.57 billion.  

Stock price (midday Aug 4, 2026, post-earnings surge): around $160.  

Rule of 40 = year-over-year revenue growth rate + adjusted operating margin. Sustaining 155% is extremely aggressive and historically rare at this scale; it requires either continued ultra-high growth, further margin expansion, or a combination.

Projection assumptions (simplified illustrative model)

To keep Rule of 40 exactly at 155% each quarter:

Growth gradually moderates (as the base gets larger) while margins expand via operating leverage.

Example path that maintains the 155% sum:

  Q3 2026: 85% YoY growth + 70% adj. margin.

  Q4 2026: 80% YoY growth + 75% adj. margin.

  Q1 2027: 75% YoY growth + 80% adj. margin.

  Q2 2027: 70% YoY growth + 85% adj. margin.

This is one plausible way to hold the combined score at 155%. (Other splits are possible—e.g., slower margin expansion and higher sustained growth.)

Rough sequential revenue build (starting from Q2 $1.935B and incorporating the company’s Q3 guidance of ~$2.16B as a starting point, then applying the growth rates above):

| Quarter | Approx. Revenue | YoY Growth (assumed) | Adj. Op. Margin (assumed) | Rule of 40 |

|-------------|-----------------|----------------------|---------------------------|------------|

| Q2 2026 | $1.935B | 93% | 62% | 155% |

| Q3 2026 | $2.16–2.25B | 85% | ~70% | 155% |

| Q4 2026 | $2.6–2.8B | 80% | ~75% | 155% |

| Q1 2027 | $3.1–3.4B | 75% | ~80% | 155% |

| Q2 2027 | $3.6–4.0B | 70% | ~85% | 155% |

Trailing-twelve-month (TTM) revenue by end of Q2 2027: roughly $11.5–13.5 billion (more than double the current run-rate).  

Adjusted operating income and EPS: With rising margins, quarterly adjusted operating income could climb into the $2.5–3.5B range by Q2 2027. Annualized adjusted EPS could reach the $3.50–$5.00+ range (depending on exact margin trajectory, share count growth from stock-based compensation, and other items). This assumes continued strong free-cash-flow conversion similar to the recent 60%+ levels.

Implied stock price scenarios after four quarters

Valuation is the biggest variable. Current multiples are very high (tens of times forward sales; high double-digit to triple-digit forward earnings multiples in recent commentary).

Bull case (premium multiple sustained or only modestly compressed)**: Market continues to reward exceptional Rule-of-40 performance with a high multiple (e.g., 40–60× forward sales or 80–120× forward earnings).  

  → Possible price range: $300–$500+.

Base case (multiple compresses as the company scales but stays elevated for high-growth software/AI)**: Multiple settles in a still-premium but lower range (e.g., 25–40× forward sales or 50–80× forward earnings).  

  → Possible price range: $200–$350.

Bearish multiple case (significant compression toward more typical high-growth software levels)**: Even with the strong fundamental trajectory, multiple contraction offsets much of the earnings growth.  

  → Possible price range: $150–$250 (or lower if sentiment turns).

Most realistic illustrative midpoint under the sustained-155% assumption: around $250–$350 by mid-2027, assuming the market still assigns a meaningful premium for the combination of growth + margins. This would represent substantial upside from the ~$160 level but is highly sensitive to the multiple the market is willing to pay.

Important caveats

This is a purely hypothetical, simplified exercise, not a prediction or investment recommendation. Sustaining a 155% Rule of 40 for four consecutive quarters would be extraordinary and is far above the company’s already-raised official guidance. Real-world results will depend on:

Actual demand durability (U.S. commercial and government),

Competition,

Expense management and share dilution,

Macro conditions, and

Investor sentiment/valuation multiples (which can swing dramatically).

Past or recent performance does not guarantee future results. Always refer to official filings, guidance, and the latest analyst research for decision-making.

Pltr continues to move up the rule of 40. I believe the above numbers are conservative. I'm happy with the projection, what about you? What are your views? Will you be happy to double your return in one year?

$Palantir Technologies Inc.(PLTR)$  $NVIDIA(NVDA)$