Palantir Slides by Most in a Year After Sales Forecast Disappoints
Shares of Palantir Technologies Inc. (PLTR) suffered their worst one-day selloff in almost a year Friday, as the data mining and analytics software company’s third-quarter results were unable to placate Wall Street despite growing sales and a raised full-year sales outlook. The artificial intelligence software company announced 39% year-over-year growth for Q1 2025, but investors weren’t pleased with the figures, and PLTR stock fell as much as 8.5% by the time the market closed. This article breaks down Palantir’s earnings, how the market reacted and what it means for the future of the tech giant.
Strong Earnings, Soft Reception Strong earnings stand out.
Palantir performed well in Q1 2025, posting massive growth as it reported $884 million in revenue – which surpassed analysts’ expectations of $863 million. The company’s U.S. commercial unit flew high on a 71% rise and government contracts popped by 45%. Fueled by that performance, the company raised its full-year revenue forecast and now expects $3.89 billion to $3.90 billion, a 36% growth rate, compared with its previous guidance of $3.75 billion.
CEO Alex Karp praised demand for Palantir’s AI software as a “ravenous tornado” and its central place in enterprise and defense applications. But the reaction from the market was more subdued. Even with the good numbers, PLTR stock tanked, as investors remain skeptical of the company’s stratospheric valuation and untested global operations.
Why the Drop? Valuation and World Struggles
Palantir’s stock is valued at an eye-popping 200 times estimated earnings, this one of the priciest in the Nasdaq 100. Even stellar results wouldn’t make sense of that kind of premium, analysts say. “Even with all the good news, it just wasn’t enough to be able to maintain the valuation going forward,” said Mandeep Singh of Bloomberg Intelligence.
To top it off, Palantir’s international business cooled, causing its customer base overseas to shrink. The international commercial unit, which makes up less than a third of its revenue, dropped 10% in Q1. That disappointing global showing was in stark contrast to its American success, and was a red flag to investors betting on across-the-board growth.
PLTR shares are reflecting a valuation at 56x 2026F rev, which analyst Brent Thill with Jefferies rates an underperform, is irrational.” “PLTR did well this quarter, but unfortunately, its valuation is now at well over record levels,” he wrote in a note to clients.
AI Traction and Strategy Wins
Palantir is still surfing the AI wave, making them appear as the leader in the field. Chief Technology Officer Shyam Sankar pointed to big wins, like growing use of the Maven AI system by the U.S. military and a new deal with NATO. “The reindustrialization of America is happening in our software,” Karp said on the earnings call, emphasizing the company’s strategic shift toward A.I. and defense.
Palantir’s software, used in everything from supply chain optimization to drone targeting by the military, is gaining wider attention. But still: Can that force overcome worries about the price and foreign vulnerabilities.
Market Jitters and What Comes Next
Stock-market ko aapl bohat by hot tech stocks refused the sharp fall in the price of PLTR broader market wariness at the high-growth tech companies, the sky-high valuations. Investors seem to be recalibrating their expectations, especially as Palantir contends with potential headwinds, including cuts by the U.S. defense budget and the slow adoption of AI in Europe.
Moving forward, the focus will be on Palantir’s next earnings report, which is scheduled to be released on August 11, 2025. Both analysts and shareholders will be watching for signs that Shopify can keep up its U.S. momentum, boost international sales and pump up growth that justifies its high flying valuation.
For now, Palantir is a polarizing stock – lauded for its innovation, but questioned for how much it is charging. As the AI boom gathers momentum, how well the company can balance growth and the confidence of its investors will determine its course.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. The views expressed are those of the author and do not necessarily reflect the official position of FinanceTract.
