WOW! Sizzling Results Underwrite AI Boom

Great results from AI stocks are coming through thick and fast – Credo Technologies, Broadcom, Microsoft, Meta Platforms, Palantir, just wow, wow, wow! There is a reason why all those stocks are in my Top 20.

The US indices are hitting new peaks, but the bull market is narrowly based with a focus on technology and AI. That’s fine for the time being, but it will need to broaden out at some point.

Palantir’s results were amazing. The Q2 results blew past all expectations.

Our tremendous second quarter results demonstrate how Palantir is redefining what is possible with enterprise AI. We remain maniacally focused on value creation for our customers. Our U.S. business is the engine of this transformation. U.S. commercial led with 93% year-over-year revenue growth, outpacing our U.S. government revenue growth of 53% year-over-year. Our overall U.S. business revenue grew 68% year-over-year and 17% sequentially and now represents 73% of total company revenue.

We surpassed $1 billion in quarterly revenue for the first time as our overall revenue growth continued to rapidly accelerate to 48% year-over-year growth in Q2. Through this record-breaking quarter, our Rule of 40 score continued to climb, reaching 94% in Q2, which is up 11 points quarter-over-quarter, particularly noteworthy given the scale of our business.

As AI continues to relentlessly advance, the market has become increasingly aware of the most important and fundamental technical reality: LLMs, on their own, are at best a jagged intelligence divorced from even basic understanding. In one moment, they may appear to outperform humans in some problem-solving task. but in the next, they make catastrophic errors no human would ever make. By contrast, our ontology is pure understanding, concretized in software. This is reality, not rhetoric, and enterprises are experiencing this reality keenly. LLMs simply don’t work in the real world without Palantir. This is the reality fueling our growth.

Ryan Taylor, Chief Revenue Officer, Palantir, Q2 2025, 4 August 2025

Palantir is like a snowball gathering bulk as it rolls downhill.

We booked our highest TCV [Total Contract Value] and ACV [Annual Contract Value] ever last quarter with $2.3 billion in TCV and $684 million in ACV. We closed a whopping 157 deals worth $1 million or more, of which 66 deals were worth $5 million or more and 42 deals were worth $10 million or more. We continue to see expansions with our existing customers as our top 20 customers now average $75 million a year in trailing 12- month revenue, up 30% from a year ago.

Ryan Taylor, Chief Revenue Officer, Palantir, Q2 2025, 4 August 2025

Even more staggering is the impact of Palantir’s software on its customers.

The impact our software is delivering for our customers as they cross the chasm is ever widening their advantage over the AI have-nots. Citibank shared that the customer onboarding process and relevant KYC and security checks that once took them 9 days now takes seconds. Fannie Mae recently announced they’re working with Palantir, decreasing the time to uncover mortgage fraud from 2 months down to seconds, saving the U.S. housing market millions in future fraud losses. Nebraska Medicine President and COO noted they saw a 2,100% increase in discharge lounge utilization, which is the equivalent of adding another unit to their hospital. They even noted, “We’ve been using the term a Palantir unit of time, and that represents when we’re driving value in less than an hour.”

Lear Corporation recently signed a 5-year extension. Over the past 2.5 years, they have leveraged foundry and AIP to support over 11,000 users and more than 175 use cases, including proactively managing their tariff exposure, automating multiple administrative workflows and dynamically balancing their manufacturing lines. Their CEO highlighted that their enterprise-wide adoption gives them, “A first-mover advantage in the automotive industry, which will be difficult to replicate.”

Ryan Taylor, Chief Revenue Officer, Palantir, Q2 2025, 4 August 2025

I could go on, but I think my subscribers already know that Palantir is the most incredible business in the known universe.

I see a three-way battle developing for the title of world’s greatest business, with the contenders being Palantir, Nvidia, and Meta Platforms. It is a no-brainer to ensure that all of these stocks are well-represented in your portfolio. Congratulations to my favourite analyst, Dan Ives of Wedbush Securities, for being on the right side of the argument with these stocks.

Nudging at the gate to make my threesome a Fab Four is Microsoft. For sheer growth, it is hard to beat Credo Technologies and for consistency over many years, Broadcom. All these companies stand at the heart of the AI-inspired 4th, 5th, whatever industrial revolution and will be key players as and when the robotics revolution gets seriously underway.

Knocking at the door and not to be forgotten is Oracle, which has made clear its intention to be a major player in the AI revolution. Not in my Top 20, but never to be ruled out is Alphabet. Their core advertising business always looks threatened, but somehow they always emerge unscathed, and they have all the credentials to be a major AI player.

Just to recap, green smileys represent chart breakouts, yellow smileys are for moving averages bunching and turning higher and blue smileys are for Coppock turning higher. This chart looks promising and logical to buy now.

The momentum in the business looks strongly positive.

Q2 was a standout quarter for us with robust growth across the company. As you saw at I/O, we are leading at the frontier of AI and shipping at an incredible pace. AI is positively impacting every part of the business, driving strong momentum. This quarter, search delivered double-digit revenue growth. Our new search features continue to perform well. AI mode has launched in the US and India and is going well, while AI overviews now have over two billion monthly users across more than two hundred countries and territories and forty languages.

Sundar Pichai, CEO, Alphabet, Q 2 2025, 23 July 2025

I am changing my mind about Alphabet. I sometimes liken the Megacaps to ringholders in The Lord of the Rings, Sauron, Saruman, the Elves, and Men; they all had rings which gave them power in Middle-earth. Alphabet is a ring holder, and as such, it belongs in the Top 20. They have so much going on.

We continue to see strong performance in YouTube as well as subscriptions, reflecting great momentum across these high-growth businesses. In the US, Shorts now earn as much revenue per watch hour as traditional in-stream on YouTube, and in some countries, it now even exceeds in-stream’s rate. Cloud had another great quarter of strong growth in revenues, backlog, and profitability. Annual revenue run rate is now more than $50 billion. We are seeing significant demand for our comprehensive AI product portfolio. Of course, this is all possible because of the long-term investments we have made in our differentiated full-stack approach to AI.

This spans AI infrastructure, world-class research, models and tooling, and our products and platforms that bring AI to people all over the world. I’ll briefly touch on the AI stack before turning to quarterly highlights. First, AI infrastructure. We operate the leading global network of AI-optimized data centers and cloud regions. We also offer the industry’s widest range of TPUs [Tensor Processing Units] and GPUs along with storage and software built on top. That’s why nearly all Gen AI unicorns use Google Cloud, and it’s why a growing number, including leading AI research labs like SAFE Superintelligence and Physical Intelligence, use TPU specifically. Our AI infrastructure investments are crucial to meeting the growth and demand from cloud customers.

Next, world-class AI research, including models and tooling. We continue to expand our Gemini 2.5 family of hybrid reasoning models, which provide industry-leading performance in nearly every major benchmark. In addition to improving our popular workhorse model, Flash, we debuted an extremely fast Flash Lite version. We achieved gold medal level performance in the International Math Olympiad using an advanced version of Gemini with Deep Tech. We can’t wait to bring DeepThink to users soon. We have some of the best models available today at every price point. Our 2.5 models have been a catalyst for growth, and nine million developers have now built for Gemini. I also want to mention VO3, our state-of-the-art video generation model.

It’s been a viral hit with people sharing clips created in the Gemini app and with our new AI filmmaking tool, Flow. Since May, over seventy million videos have been generated using VO3, and we recently introduced a feature in the Gemini app to turn photos into videos, which people absolutely love. It’s also rolling out to Google Photos users starting today. Third, our products and platforms. We are bringing AI to all our users and partners through surfaces like Workspace, Grow, and Mold. The growth in usage has been incredible. At I/O [Innovation in the Open] in May, we announced that we processed four hundred and eighty trillion monthly tokens across our surfaces.

Since then, we have doubled that number, now processing over nine hundred and eighty trillion monthly tokens—a remarkable increase. The Gemini app now has more than four hundred and fifty million monthly active users, and we continue to see strong growth in engagement, with daily requests growing over fifty percent from Q1. In June alone, over fifty million people used AI-powered meeting notes in Google Meet. And powered by VO3, our new short video product in Workspace called Google Meets reached nearly one million monthly active users. This month at Samsung Galaxy Unpacked, we announced new Android and AI features that are available on Samsung’s latest devices.

Sundar Pichai, CEO, Alphabet, Q 2 2025, 23 July 2025

Share Recommendations

Palantir. PLTR

Microsoft. MSFT

Nvidia. NVDA

Meta Platforms. META

Credo Technology. CRDO

Oracle ORCL

Alphabet. GOOGL

All these shares, now including Alphabet, are in my Top 20, which is now 22 shares.