Palantir’s Two-Front War: Commercial Rocket Meets UK Political Weight

Palantir's US commercial revenue surges 133% in Q1 2026, but UK political and legal battles over police and NHS contracts drag stock down 37% from all-time high.

Palantir’s stock is being pulled in opposite directions. On one side, the company’s US commercial business is exploding – up 133% year-on-year in the first quarter of 2026, with the AIP platform landing ever deeper in corporate workflows. On the other, a legal fight with the London mayor over a £50 million police contract and mounting political scrutiny of its NHS deal are casting a shadow over its UK operations. The market, it seems, is struggling to reconcile the two.

The immediate trigger for the UK headache came in late May 2026, when Mayor Sadiq Khan blocked a contract that would have put Palantir’s software into the Metropolitan Police for automated investigative data analysis. Khan’s office argued the procurement process was flawed – Palantir was the only bidder considered, which they said shut out fair competition. Louis Mosley, Palantir’s UK chief, fired back, accusing the mayor’s office of putting politics ahead of public safety.

That dispute is just part of a broader UK backlash. Technology Secretary Liz Kendall is now reviewing a £330 million NHS contract, with ministers reportedly considering activating an exit clause that kicks in early next year. A parliamentary committee had already labelled Palantir’s entrenched position in Britain’s public sector an “unacceptable vulnerability,” and Deputy Prime Minister David Lammy has called for greater supplier diversity. The message is clear: London wants to reduce its dependence on a single data infrastructure provider.

Yet Palantir’s underlying business numbers are anything but weak. Revenue hit $1.63 billion in the first quarter, up nearly 85% from a year earlier. Earnings per share came in at $0.33, beating analyst estimates. The US commercial arm, powered by the AIP bootcamp model that turns prospects into paying customers in days, is the star performer. A new partnership with SAP in May 2026, focused on AI-driven data migration, adds to that momentum.

Despite the financials, the stock is retreating. At €112.88, the shares sit about 37% below the November 2025 all-time high of €179.98. Since the start of the year, more than a fifth of the value has been wiped out. The relative strength index at 41.6 points to technical weakness, and the price is trading below all key moving averages – roughly 17% under its 200-day line. Annualised volatility of 57% underscores the wild ride.

Palantir is trying to pivot away from its reputation as a pure government contractor. CEO Alex Karp is selling the company as a cost controller for corporate AI spending, arguing that many companies are blowing budgets on large language models without clear returns. New commercial wins back that claim: a partnership with law firm Kirkland & Ellis to build an AI platform for private-equity fundraising, integration with Google Cloud’s BigQuery and Gemini models, and deals with insurer GNP Seguros and construction firm McCarthy Building. AIP bootcamps are shortening sales cycles dramatically.

The valuation question remains uncomfortable. With a market capitalisation of roughly €281 billion, Palantir trades at a multiple that only makes sense if the commercial explosion continues accelerating. The 133% growth in US commercial is real, but so is the 57% annualised volatility and the UK political headwinds. Neither negates the other.

The next quarterly report will be pivotal. It will show whether the Q1 pace can be sustained – and whether the market’s earlier enthusiasm was a forward bet on dominance or a case of pricing in perfection. Until then, Palantir’s stock is caught between a commercial rocket and a political anchor, waiting for one to tip the balance.