A red-hot Palantir earnings report sent the stock soaring, and the case stays bullish for long-term investors despite a stretched valuation.

• Palantir's revenue nearly doubled from a year ago, with its commercial business growing even faster than its government work.
• The stock jumped 29% in a day, a move that looks partly driven by traders piling in on borrowed money.
• Fewer new customers are signing up, but existing customers keep spending far more — the key sign of strength, since Palantir only takes on clients who can pay huge sums and turns most others away.
• The catch: the stock is very expensive, throwing off just 1% cash return versus about 11% for rival Salesforce, so buyers are paying a big premium for the moat.
• Costs are set to jump next quarter on new hiring and marketing, the main warning sign in the report.

Outlook: The year-end target is lifted to about $202, and the stock could still multiply several times over by 2030 even if growth slows sharply.