Palantir Technologies has stunned Wall Street with a blockbuster quarter, yet its soaring financials are colliding with deepening controversy over its military and immigration work. The company's shares jumped more than 14 percent in after-hours trading after it reported second-quarter revenue of $1.94bn, a 93 percent year-on-year surge that CEO Alex Karp called “otherworldly.” Main Developments Revenue from Palantir's US government business climbed 90 percent to $809m, while US commercial revenue grew 149 percent year-on-year, according to the company's earnings report. The firm raised its full-year revenue forecast to between $8.15bn and $8.158bn, up from an earlier projection of $7.65bn to $7.662bn. Karp attributed the boom to what he called “AI sovereignty,” telling shareholders that “our business is compounding at a rate and scale that we have never before witnessed.” The company cited strong demand from both commercial clients and government agencies as the driving force behind the quarter's performance. Read also: Gaza patients return home as thousands still blocked from care Background Founded in 2003 by Karp, Peter Thiel, and other tech entrepreneurs, Palantir has long positioned itself as a data analytics powerhouse for government and corporate clients. The company opened its first Israeli office in 2015 and expanded its work with the Israeli military after declaring a “strategic partnership” with Israel in January 2024. That partnership has drawn intense scrutiny as Palantir's software supports Israel's military campaign in Gaza and operations in the occupied West Bank. Open Intel, a platform tracking corporate involvement in the war, says Palantir has actively recruited former members of Israel's elite Unit 8200 cyberintelligence division, integrating intercepted communications, satellite imagery, and other data to help generate military targeting lists. Criticism extends beyond Israel. Palantir holds multibillion-dollar contracts with US agencies, including the US Army, and has faced opposition over its role in President Donald Trump's immigration crackdown, which opponents say has led to unlawful deportations and killings. In the UK, a $323m Ministry of Defence contract and a separate $444m NHS deal have sparked concerns over sensitive data handling and heavy redaction of contract documents. Why It Matters Palantir's explosive growth signals that demand for AI-driven military and surveillance technology is accelerating, even as public opposition intensifies. The company's philosophy, outlined in the recent book The Technological Republic co-authored by Karp and Nicholas W Zamiska, argues that tech firms have a responsibility to build advanced military AI capabilities—a stance critics label “techno-fascism.” With government contracts fueling much of its revenue, Palantir's success raises urgent questions about the ethical boundaries of AI in warfare, immigration enforcement, and healthcare. Each new deal, from Gaza targeting support to NHS data processing, amplifies the tension between corporate profit and human rights concerns. What's Next Palantir's raised guidance suggests continued momentum, but the company faces mounting legal and reputational challenges. Activist groups like Open Intel are likely to escalate pressure on governments to scrutinize contracts, while UK campaigners may push for greater transparency in NHS and defence agreements. Investors will watch whether Palantir can sustain its growth rate amid potential regulatory backlash and public boycotts. The company's next quarterly report will reveal if the “otherworldly” pace holds or if controversy begins to bite into its bottom line.