Palantir shares fall after earnings as analysts keep bullish outlook

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Palantir shares fall after earnings

Highlights

Palantir reported adjusted EPS of 44 cents (vs. 41 cents expected) and $2.31 billion in revenue (vs. $2.18 billion consensus), but shares fell over 7% on weaker booking metrics.
U.S. commercial revenue doubled to $984 million, surpassing U.S. government revenue for the first time, yet non-U.S. commercial bookings showed weakness.
Major banks including Deutsche Bank, Bank of America, UBS, and Citi reiterated bullish ratings with price targets ranging from $233 to $262, citing strong AI platform demand and defense modernization.

Quarterly results beat forecasts despite booking concerns

As reported by CNBC, Palantir posted adjusted earnings of 44 cents per share, ahead of the 41 cents expected by analysts polled by LSEG, while revenue reached $2.31 billion versus a $2.18 billion consensus.

U.S. commercial revenue more than doubled to $984 million and exceeded U.S. government revenue for the first time in the company's history. Even so, the market reaction remains negative, with shares falling more than 7% in premarket trading on Tuesday after investors focus on softer total contract value per booking figures and weaker non-U.S. commercial booking growth.

William Blair analyst Louie DiPalma says the stock should recover as Palantir continues to show growth that is "more resilient than others." In a note to clients on Tuesday, he says recurring revenue and the group's exposure to defense agencies support elevated commercial and government revenue growth for the next several years, while William Blair maintains an outperform rating and sees upside to $200 over the next year.

Wall Street backs AI and government demand outlook

Other major banks also maintain positive views on the stock, pointing to accelerating growth across Palantir's commercial and government businesses. Deutsche Bank keeps a buy rating with a $240 target, saying the company continues to strengthen its position in enterprise software through a combination of growth and profitability.

Bank of America, UBS, JPMorgan and Citi all reiterate buy-equivalent ratings, with price targets ranging from $250 to $262. Their notes highlight rising demand for AI platforms, sovereign AI opportunities, stronger military and intelligence modernization spending, and revenue growth that continues to accelerate even as some analysts flag flat backlog trends or less robust booking metrics.

Morgan Stanley remains more cautious with an equal-weight rating, though analyst Sanjit Singh raises his price target to $233 from $205. Even there, the firm says Palantir is entering a new phase of growth tied to sovereign AI and open-weight model adoption, reinforcing the view that the company remains a key beneficiary of enterprise and government AI spending.

Our earlier article on the S&P 500’s push toward 8,000 explained that investors were bracing for a high bar this earnings season after an AI-led rally, with higher oil prices, elevated Treasury yields, and election uncertainty raising the risk of disappointment. It also highlighted growing concentration and weakening market breadth, suggesting that even strong results from market leaders may not be enough to keep sentiment uniformly positive.

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