Key Points
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A bullish analyst anticipates that Palantir will post a strong earnings beat and raise its guidance when it releases results on August 3.
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Michael Burry, known for his “Big Short” positions, warns that Palantir resembles a sand castle vulnerable to a slowdown in AI adoption.
Palantir Technologies (NASDAQ: PLTR) is a leading data‑analytics firm whose software solutions support military operations as well as commercial enterprises, offering real‑time insights by aggregating data from thousands of sources.
Palantir’s stock surged in April 2023 after it launched the Artificial Intelligence Platform (AIP), which integrates with its Gotham and Foundry suites, enabling users to query data in natural language, automate workflows, and leverage generative AI for task proposals and execution.
Palantir’s stock has risen 1,380% since the launch of its Artificial Intelligence Platform, meaning a $10,000 investment made then would now be worth over $147,000. Although the stock has pulled back about 40% from its peak this year, the company continues to deliver strong revenue and earnings growth.
Source: Palantir.
In the first quarter, Palantir reported $1.63 billion in revenue, driven by a 133% increase in U.S. commercial revenue to $595 million and an 84% rise in U.S. government revenue to $687 million. The firm closed 206 contracts, each exceeding $1 million, including 72 deals over $5 million and 47 over $10 million.
Palantir closed with a total contract value of $2.41 billion for the quarter, indicating continued revenue momentum. Net income rose 53% year‑over‑year to $870.5 million.
CEO Alex Karp described the results as “staggering growth” and noted that the company achieved these results with a leaner workforce than two years earlier.
While some within the industry are spending their way to a version or likeness of growth, we have built the platforms that are delivering record and accelerating levels of profit. We generated a total of $871 million in profit in the first quarter of the year, more than four times greater than the same period the year before. It is worth reiterating. Our quarterly profit — the largest in our company’s 23-year history — has more than quadrupled in only 12 months. These are not incremental or marginal advances.
Palantir projects Q2 revenue of $1.797 billion to $1.801 billion and full‑year revenue of $7.65 billion to $7.662 billion. Analyst Param Singh of Oppenheimer anticipates a robust earnings beat and a $200 price target, implying roughly 60% upside for the stock.
Image source: The Motley Fool.
The bull case for Palantir
Palantir’s most compelling attribute is its rapid, accelerating growth. Despite AIP being three years old, both revenue and earnings are expanding at a remarkable pace.
Quarter
Revenue Growth Percentage (YOY)
Net Income Growth %
U.S. Commercial Revenue Growth %
U.S. Government Revenue Growth %
Q1 2024
21%
17%
40%
16%
Q2 2024
27%
20%
55%
24%
Q3 2024
30%
20%
54%
40%
Q4 2024
36%
16%
64%
45%
Q1 2025
39%
24%
71%
45%
Q2 2025
48%
33%
93%
53%
Q3 2025
63%
40%
121%
52%
Q4 2025
70%
36%
137%
66%
Q1 2026
85%
53%
133%
84%
The bear case for Palantir
While I have invested in Palantir for several years and acknowledge its strengths, two significant concerns could affect investors.
Palantir trades at a forward P/E of roughly 90, a level that appears stretched compared with Nvidia, which trades near a P/E of 22. A high forward P/E indicates that the market is already factoring in substantial future growth. Although Palantir’s revenue and earnings have risen sharply, its forward P/E has exceeded 240, reflecting intense bullish sentiment. If growth decelerates, the valuation could contract sharply.
Michael Burry, the former Scion Capital hedge‑fund manager famed for his “Big Short” trade, describes Palantir as a sand‑castle propped up by AI applications and warns that its valuation is excessive, making the stock vulnerable to any slowdown in AI expansion.
Additionally, Palantir’s business model centers on an aggressive expansion of its U.S. government contracts, encompassing the Department of Homeland Security, the Pentagon, the IRS, and the Social Security Administration. Its platforms were also employed by the now‑defunct Department of Government Efficiency (DOGE), and some employees have voiced public opposition to the company’s government engagements.
Investors who weigh a company’s mission and client base may decide to exclude Palantir from their portfolios if they are uneasy about its government contracts.
The bottom line on Palantir
Palantir has delivered flawless performance in recent years, with impressive earnings and revenue growth; however, much of this optimism is already priced into the stock. Investors considering a position should adopt a measured approach, weighing the company’s operations and its capacity to sustain margin expansion.
Should you buy stock in Palantir Technologies right now?
Prospective investors should assess whether Palantir aligns with their investment objectives, risk tolerance, and confidence in its long‑term growth prospects before making a purchase.
