Palantir Stock Declines Amid Investor Caution
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy PLTR?
Source: Fool
- Stock Movement: Palantir's stock fell by 2.8% on Wednesday, trading at $138.07 as of 2:30 p.m. ET, reflecting investor caution towards AI stocks amid a broader market decline.
- Market Sentiment: While no specific news triggered the drop, reports of OpenAI's revenue and engagement metrics falling short of expectations have raised concerns about tech sector valuations, prompting investors to reassess risks associated with AI stocks.
- Financial Outlook: Palantir is set to release its Q1 earnings on May 4, with sales guidance between $1.532 billion and $1.536 billion, indicating confidence in performance despite cautious market sentiment.
- Growth Potential: The company anticipates U.S. commercial revenue exceeding $3.144 billion, suggesting an annual growth rate of at least 115%, highlighting Palantir's robust growth potential despite competitive pressures, particularly in projected adjusted free cash flow between $3.925 billion and $4.125 billion.
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Analyst Views on PLTR
Wall Street analysts forecast PLTR stock price to rise
17 Analyst Rating
5 Buy
10 Hold
2 Sell
Hold
Current: 141.180
Low
50.00
Averages
192.88
High
255.00
Current: 141.180
Low
50.00
Averages
192.88
High
255.00
About PLTR
Palantir Technologies Inc. is engaged in building software to assist in counterterrorism investigations and operations. The Company has built four principal software platforms, including Palantir Gotham (Gotham), Palantir Foundry (Foundry), Palantir Apollo (Apollo), and Palantir Artificial Intelligence Platform (AIP). Apollo is a cloud-agnostic, single control layer that coordinates ongoing delivery of new features, security updates, and platform configurations, helping to ensure the continuous operation of critical systems. Gotham enables users to identify patterns hidden deep within datasets, ranging from signals intelligence sources to reports from confidential informants. Foundry transforms the ways organizations operate by creating a central operating system for their data. AIP enables responsible artificial intelligence (AI)-advantage across the enterprise by using primary, core components built to effectively activate large language models and other AI within any organization.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Palantir Stock Declines Amid Investor Caution
- Stock Movement: Palantir's stock fell by 2.8% on Wednesday, trading at $138.07 as of 2:30 p.m. ET, reflecting investor caution towards AI stocks amid a broader market decline.
- Market Sentiment: While no specific news triggered the drop, reports of OpenAI's revenue and engagement metrics falling short of expectations have raised concerns about tech sector valuations, prompting investors to reassess risks associated with AI stocks.
- Financial Outlook: Palantir is set to release its Q1 earnings on May 4, with sales guidance between $1.532 billion and $1.536 billion, indicating confidence in performance despite cautious market sentiment.
- Growth Potential: The company anticipates U.S. commercial revenue exceeding $3.144 billion, suggesting an annual growth rate of at least 115%, highlighting Palantir's robust growth potential despite competitive pressures, particularly in projected adjusted free cash flow between $3.925 billion and $4.125 billion.
See More
Cleveland-Cliffs Partners with Palantir for AI Integration
- AI Technology Partnership: Cleveland-Cliffs has signed a three-year agreement with Palantir to integrate AI software into production planning, order entry, and daily operations, aiming to enhance manufacturing efficiency amid intensifying global steel competition.
- Data Integration Improvement: By implementing Palantir's platform, Cleveland-Cliffs seeks to improve data integration and coordination across facilities, which is expected to optimize decision-making processes and enhance overall operational performance, driving the company's modernization efforts.
- Complexity Management: CEO Lourenco Goncalves emphasized that the complexity of integrated steelmaking allows Palantir's platform to provide solutions that surpass human-driven processes, demonstrating the company's strategic commitment to boosting productivity and performance.
- Industry Transformation Signal: This partnership represents not only an incremental step in Cleveland-Cliffs' productivity enhancement efforts but also reflects a broader trend of traditional industrial players increasingly relying on AI technology to gain operational advantages and adapt to rapidly changing market conditions.
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Citi Optimistic on Palantir Growth but Lowers Price Target
- Optimistic Growth Outlook: Citi expresses optimism regarding Palantir's growth prospects, projecting about 45% upside for FY26 and FY27 estimates, with projections for FY27 and FY28 exceeding consensus by over 500 basis points, indicating steady traction in both government and commercial sectors.
- Key Contract Wins: Palantir secured a $1 billion contract with the Department of Homeland Security and deals with the USDA, highlighting its ongoing expansion in government sectors, while renewals with Airbus and Stellantis indicate improving international momentum.
- Price Target Adjustment: Citi has lowered Palantir's price target from $260 to $210, reflecting broader valuation pressures in the software industry, yet maintains a 'Buy' rating, arguing that the company remains a clear winner as AI adoption accelerates.
- Valuation Level Analysis: Even after the price target cut, Palantir's valuation remains high, trading at approximately 48x FY27 EV to sales and about 87x EV to free cash flow, suggesting that a significant amount of optimism is already priced into the stock.
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Palantir Q1 Expectations Boosted by Commercial Growth and Government Contracts
- Commercial Acceleration: Wedbush analysts project Palantir's Q1 2026 revenue to exceed $1.54 billion, driven by robust performance in the US commercial sector, with expectations for commercial revenue growth to surpass the 139% year-over-year increase reported last quarter, thereby solidifying its market position.
- Government Contract Opportunities: Palantir has secured a $300 million contract with the US Department of Agriculture to manage farmland assets and supply chain risks using its software, while also pursuing a contract with the Federal Aviation Administration to integrate AI into air traffic control systems, indicating sustained demand in the government market.
- Profitability Outlook: Despite ongoing investments in product development and AI initiatives, Wedbush believes Palantir's first-quarter income expectations of approximately $870 million to $874 million are achievable, reflecting the company's robust performance in profitability.
- Significant Market Potential: Analysts highlight that with increasing AI adoption, Palantir has the potential to reach a trillion-dollar market capitalization in the coming years, indicating that its leadership in AI and continuous innovation will drive long-term growth for the company.
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- Addressing Industry Pain Points: In the absence of a unified data provider, Blockworks aims to consolidate fragmented data services to alleviate traders' challenges in accessing information, thus promoting trading and market growth for digital assets.
- Trust Issue Mitigation: The founder of Blockworks highlighted a trust crisis in the crypto market, emphasizing the need for businesses to enhance transparency to gain institutional investor trust, while the company plans to address this by providing reliable data and information to foster broader asset adoption.
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Palantir Stock Declines Amid Investor Caution
- Stock Movement: Palantir's stock fell by 2.8% on Wednesday, trading at $138.07 as of 2:30 p.m. ET, reflecting investor caution towards AI stocks amid a broader market decline.
- Market Sentiment: While no specific news triggered the drop, reports of OpenAI's revenue and engagement metrics falling short of expectations have raised concerns about tech sector valuations, prompting investors to reassess risks associated with AI stocks.
- Financial Outlook: Palantir is set to release its Q1 earnings on May 4, with sales guidance between $1.532 billion and $1.536 billion, indicating confidence in performance despite cautious market sentiment.
- Growth Potential: The company anticipates U.S. commercial revenue exceeding $3.144 billion, suggesting an annual growth rate of at least 115%, highlighting Palantir's robust growth potential despite competitive pressures, particularly in projected adjusted free cash flow between $3.925 billion and $4.125 billion.
See More
Cleveland-Cliffs Partners with Palantir for AI Integration
- AI Technology Partnership: Cleveland-Cliffs has signed a three-year agreement with Palantir to integrate AI software into production planning, order entry, and daily operations, aiming to enhance manufacturing efficiency amid intensifying global steel competition.
- Data Integration Improvement: By implementing Palantir's platform, Cleveland-Cliffs seeks to improve data integration and coordination across facilities, which is expected to optimize decision-making processes and enhance overall operational performance, driving the company's modernization efforts.
- Complexity Management: CEO Lourenco Goncalves emphasized that the complexity of integrated steelmaking allows Palantir's platform to provide solutions that surpass human-driven processes, demonstrating the company's strategic commitment to boosting productivity and performance.
- Industry Transformation Signal: This partnership represents not only an incremental step in Cleveland-Cliffs' productivity enhancement efforts but also reflects a broader trend of traditional industrial players increasingly relying on AI technology to gain operational advantages and adapt to rapidly changing market conditions.
See More
Citi Optimistic on Palantir Growth but Lowers Price Target
- Optimistic Growth Outlook: Citi expresses optimism regarding Palantir's growth prospects, projecting about 45% upside for FY26 and FY27 estimates, with projections for FY27 and FY28 exceeding consensus by over 500 basis points, indicating steady traction in both government and commercial sectors.
- Key Contract Wins: Palantir secured a $1 billion contract with the Department of Homeland Security and deals with the USDA, highlighting its ongoing expansion in government sectors, while renewals with Airbus and Stellantis indicate improving international momentum.
- Price Target Adjustment: Citi has lowered Palantir's price target from $260 to $210, reflecting broader valuation pressures in the software industry, yet maintains a 'Buy' rating, arguing that the company remains a clear winner as AI adoption accelerates.
- Valuation Level Analysis: Even after the price target cut, Palantir's valuation remains high, trading at approximately 48x FY27 EV to sales and about 87x EV to free cash flow, suggesting that a significant amount of optimism is already priced into the stock.
See More
Palantir Q1 Expectations Boosted by Commercial Growth and Government Contracts
- Commercial Acceleration: Wedbush analysts project Palantir's Q1 2026 revenue to exceed $1.54 billion, driven by robust performance in the US commercial sector, with expectations for commercial revenue growth to surpass the 139% year-over-year increase reported last quarter, thereby solidifying its market position.
- Government Contract Opportunities: Palantir has secured a $300 million contract with the US Department of Agriculture to manage farmland assets and supply chain risks using its software, while also pursuing a contract with the Federal Aviation Administration to integrate AI into air traffic control systems, indicating sustained demand in the government market.
- Profitability Outlook: Despite ongoing investments in product development and AI initiatives, Wedbush believes Palantir's first-quarter income expectations of approximately $870 million to $874 million are achievable, reflecting the company's robust performance in profitability.
- Significant Market Potential: Analysts highlight that with increasing AI adoption, Palantir has the potential to reach a trillion-dollar market capitalization in the coming years, indicating that its leadership in AI and continuous innovation will drive long-term growth for the company.
See More
Blockworks Plans to Acquire Rivals to Expand Data Platform
- Funding Expansion Plan: Blockworks plans to acquire rivals using undisclosed funds from its recent fundraising, aiming to enhance its digital asset data platform and become a high-quality tool provider akin to Morningstar, thereby increasing market competitiveness.
- Growing Market Demand: With the rapid growth of the crypto market, Blockworks reported over 500% growth in annual recurring revenue last year, demonstrating its strong capability to meet traders' demands for high-quality data, further driving business expansion.
- Addressing Industry Pain Points: In the absence of a unified data provider, Blockworks aims to consolidate fragmented data services to alleviate traders' challenges in accessing information, thus promoting trading and market growth for digital assets.
- Trust Issue Mitigation: The founder of Blockworks highlighted a trust crisis in the crypto market, emphasizing the need for businesses to enhance transparency to gain institutional investor trust, while the company plans to address this by providing reliable data and information to foster broader asset adoption.
See More
Latest Wall Street Rating Updates
- Starbucks Rating Maintained: Morgan Stanley reiterates its overweight rating on Starbucks, indicating that the ongoing debate about the company's earnings power reflects an improving narrative that may attract more investor interest.
- Robinhood Outlook Positive: Bernstein maintains an outperform rating on Robinhood, noting that HOOD stock marked a bottom in Q1 and has started strong in April, suggesting increasing market confidence in its future.
- CoreWeave Price Target Raised: Wells Fargo raises CoreWeave's price target from $125 to $135, believing that the company's leading position in AI infrastructure will allow it to benefit as demand continues to outpace supply.
- Telecom Argentina Upgrade: JPMorgan upgrades Telecom Argentina from neutral to overweight, expecting substantial benefits from market consolidation as the antitrust review of its acquisition of Telefonica Argentina nears completion.
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