Palantir Technologies Inc. (NASDAQ:PLTR) saw its stock climb 2.4% to $115.70 on Monday following the announcement of a new artificial intelligence collaboration with NVIDIA Corporation (NASDAQ:NVDA). The partnership targets U.S. government agencies and critical infrastructure operators, aiming to deploy advanced AI models within secure, sovereign environments. Trading volume surged to roughly $5.1 billion in Palantir shares, adding approximately $7.0 billion to the company's market capitalization for the day.
The collaboration leverages Nvidia's AI and Nemotron open-source models, which Palantir will integrate into its platforms for classified and air-gapped settings. According to Palantir CEO Alex Karp, this setup reduces security risks associated with closed models, while Nvidia CEO Jensen Huang emphasized that open-source AI is foundational for national security. The announcement underscores a deepening tie between the two tech firms in the government sector.
Despite Monday's rally, Palantir's valuation remains stretched. The stock is trading at roughly 38.9 times the midpoint of the company's 2026 revenue guidance of $7.656 billion. With a market cap of $297.5 billion, the price-to-sales multiple leaves little room for error. The company's 2026 adjusted operating income midpoint stands at $4.446 billion, giving a valuation multiple of 66.9x.
Palantir's U.S. business has become the primary growth driver. In the first quarter, U.S. revenue surged 104% year-over-year to $1.28 billion, with government sales reaching $687 million and commercial revenue at $595 million. Total company revenue rose 85% to $1.63 billion, while adjusted operating income hit $984 million, representing a 60% margin. The company projects second-quarter revenue between $1.797 billion and $1.801 billion, with adjusted operating income of $1.063 billion to $1.067 billion.
The broader market also advanced on Monday, with the S&P 500 gaining 1.16%, the Nasdaq Composite jumping 2.04%, and the Dow Jones Industrial Average closing at a record high. Palantir's performance kept pace with the Invesco QQQ Trust (NASDAQ:QQQ), which rose 2.5%, while outpacing the SPDR S&P 500 ETF (NYSEARCA:SPY), which added 1.7%. Nvidia shares posted a more modest gain of 1.2%, closing at $194.97.
Despite the positive news, Palantir shares remain under pressure from a challenging June. The stock had fallen 26% during the month before Monday's bounce, according to Barron's. Shares continue to trade below both their 50-day moving average of approximately $136 and their 200-day moving average near $159, indicating that the recovery has yet to close the technical gap.
Institutional activity was modest. Cathie Wood's ARK Invest purchased 30,500 Palantir shares on Thursday across three ETFs, a position that represents just 0.07% of Monday's trading volume. The company's next catalyst will be its second-quarter earnings report, where investors will look for continued execution on U.S. commercial growth, which Palantir expects to exceed $3.224 billion in 2026, targeting growth of at least 120%.
