Copyright investors
Palantir Technologies (PLTR) reported third quarter earnings and revenue that topped Wall Street targets, boosted by U.S. government and commercial growth. Palantir stock, which hit an all-time high ahead of the earnings report, fell early Tuesday as investors mulled the size of the Q3 beat and guidance. The maker of data analytics software reported Palantir earnings after the market close on Monday. Meanwhile, S&P 500 and Nasdaq composite futures fell early Tuesday morning. Like many artificial intelligence stocks, Palantir has a lofty valuation. "The S&P 500 Index continues its orderly, low-volatility rally within a well-defined trend channel, but recent gains have been led by an even narrower group of stocks, with internal breadth and momentum indicators not confirming new highs," said JPMorgan analyst Jason Hunter in a report. "Historically, these conditions suggest rally exhaustion." In Q3, Palantir earnings were 21 cents on an adjusted basis, doubling from a year earlier. Revenue climbed 63% to $1.18 billion, the software maker said. Analysts expected Palantir to report Q3 adjusted profit of 17 cents per share and revenue of $1.09 billion. September quarter revenue beat estimates by 8%, roughly the same as in the previous quarter. "In a sector of unsteady growth rates, Palantir once again delivered a strong quarter with significant reacceleration on total revenue and a new high water mark on margins," said Citi analyst Tyler Radke in a report. "The company closed 53 $10 million deals in the quarter versus 42 deals last quarter." Palantir Stock: Key Growth Metrics Over the previous four quarters, Palantir sales had accelerated 30%, 36%, 39% and 48%. In Q3, U.S. commercial revenue grew 121% year-over-year to $397 million. U.S. government revenue grew 52% to $486 million, slightly above Wall Street targets. Also, analysts projected more than 46% U.S. government revenue growth to $475 million, with U.S. commercial revenue growth of over 90% to $344 million, according to Visible Alpha. At RBC Capital, analyst Rishi Jaluria said in a report: "Results remain overwhelmingly U.S.-centric, with international performance stagnant and bookings heavily skewed toward multi-year U.S. commercial Al contracts that may pull forward demand. While profitability remains strong, we see limited visibility into normalized growth once these early AIP (artificial intelligence platform) deployments mature." In a letter to shareholders, Chief Executive Alex Karp said: "In the United States, our commercial business has now more than doubled in the last 12 months, growing 121% and generating $397 million in the last quarter. This segment of our operations is an absolute juggernaut." Q3 adjusted operating income of $601 million came in above consensus estimates of $502 million. Operating margin improved to 51% from 46% the previous quarter. On the stock market today, Palantir stock fell over 7% to near 192 in early trading. At Deutsche Bank, analyst Brad Zelnick in a report said Palantir posted stellar Q3 results but other issues may be pressuring the stock amid a premium valuation. "We also note the company's $6.4 billion cash hoard with a de minimis share buyback ($56 million year-to-date) is beginning to attract attention from retail shareholders desirous of capital returns," Zelnick said. PLTR Stock: Updated 2025 Outlook For the current quarter ending in December, Palantir said it expects revenue of $1.329 billion versus estimates of $1.176 billion. Management raised its 2025 revenue outlook by $252 million at the midpoint, including the Q3 beat. The company expects 53% to 54% revenue growth in 2025, up from earlier guidance of 45%. But Palantir raised its free cash flow guidance by only raised by $100 million, versus $200 million increases in the previous two quarters, noted a William Blair report. New Record High Ahead of the Q3 earnings report, Palantir stock hit a record high of 207.46 on Monday. Palantir stock had soared 175% in 2025 as of Monday's market close. The lofty valuation of Palantir stock has been debated on Wall Street. On Palantir's earnings call with Wall Street analysts, Karp noted the company's work for "ICE," referring to the U.S. Immigration and Customs Enforcement agency, and other government projects. "We're rocking along. Please turn on the conventional television and see how unhappy those that didn't invest in us are," Karp said. "Enjoy, get some popcorn. They're crying. We are every day making this company better. And we're doing it for this nation, for allied countries. And also for – and I never really like the term, retail investors. How about sane people who put up their own money and fight for us? And by the way, you are fighting for the right side of what should work in this country meritocracy, lethal technology vis-a-vis adversaries, products that spread GDP to working class men and women by making their value creation higher." Meanwhile, Palantir's data analytics software has been utilized by government customers for intelligence gathering, counterterrorism and military purposes. It's now targeting generative artificial intelligence applications in health care, energy and manufacturing. Palantir is among artificial intelligence stocks to watch. Also, here's the back story on Palantir. Palantir Stock Technical Ratings Also, Palantir stock holds a Composite Rating of 99 out of a best-possible 99, according to IBD Stock Checkup. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better. Palantir stock owns an Accumulation/Distribution Rating of C-plus. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. A+ signifies heavy institutional buying; E means heavy selling. Think of a C grade as neutral. Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing. YOU MAY ALSO LIKE
