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Q2 Earnings Expose a Valuation Gap Between Growth Stories and Cash Flow

Published August 11, 20269 min read

An illustration showing a tall, golden, wireframe structure on the left and a solid, golden cube on the right, separated by a deep, jagged chasm in dark ground, with dark wavy patterns in the background. — The market is splitting into two distinct camps: high-growth valuations versus cash-rich stability. Illustration: MarketIntelLabs

Q2 earnings season has split the equity market into two camps that have nothing to do with sector and everything to do with how a company's stock price relates to the cash it actually generates. Palantir grew revenue 93% and posted a 55% net income margin, numbers that would make almost any software company's quarter, and its shares rose a modest 1.87% on the print. Garmin, a wearables and navigation company growing revenue at a comparatively pedestrian 11%, hit a fresh all-time high of $314.28. The market is not paying for growth. It is paying for growth it can underwrite.

Key Takeaways Palantir trades near 100x 2026 earnings estimates despite 93% revenue growth, leaving the stock (last at $…

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