Palantir Analysts Laud ‘Fantastic’ Beat-And-Raise Quarter, Blame Valuation For Stock Drop — Retail Keeps The Faith

• U.S. commercial revenue, accounting for $397 million, climbed 121% YoY.
• The company also raised its full-year guidance for the segment.
• The fourth-quarter guidance indicated record sequential revenue growth. 

Palantir Technologies, Inc. (PLTR) shares fell in Monday’s extended session despite a beat-and-raise third quarter from the artificial intelligence (AI)-powered data analytics company. Notwithstanding the post-earnings stock dip, analysts and retail traders were largely optimistic on the stock.

After rising 3.35% to a fresh high of $207.18 in Monday’s regular session, Palantir’s stock fell 4.19% in the after-hours.

What Retail Says About Palantir’s Q3 

Following the results, retail remained ‘extremely bullish’ about Palantir stock as of late Monday, with sentiment rising a few notches higher within the zone, and the message volume turned ‘extremely high.’ Retail chatter over the 24 hours leading up to late Monday spiked 4,425%.

A bullish user called the results “top-tier and in a league of their own.” Another user shrugged off the after-hours drop and called the quarter “beautifully bombastic.”

One user expected the stock to receive a lift from analyst upgrades.

Analysts Gush Over Palantir’s Q3

Epistrophy Capital Research Chief Market Strategist Cory Johnson sees Palantir’s growth as “fantastic.” In an interview with Yahoo Finance, Johnson stated that the company achieved a dramatic 121% year-over-year increase in commercial revenue, surpassing his 99% growth expectations. “It's fantastic growth in a business that was already going at an incredible rate.”

He also highlighted that the growth rates of Palantir’s businesses continue to accelerate, and that profitability is “incredible.” According to the strategist, a lack of a dramatic stock move is because it has already moved dramatically. He also foresees a big retail push, given its interest in the stock.  While agreeing that the stock is “insanely expensive” by any measure, Johnson said, “It is priced for this dream of all-encompassing Palantir AI, government services.”

In an X post, Wedbush’s Daniel Ivers said, “The Messi of AI delivers another masterpiece quarter with US commercial business the key driver.” “The AI Revolution is front and center for Palantir in this breakout quarter.”  Speaking on CNBC’s Closing Bell, Ives said that about $2.55 billion in revenue from the U.S. commercial business could help Palantir achieve a $1 trillion market capitalization. 

Palantir’s Q3 Earnings Snapshot

CEO Alex Karp said, “We are yet again announcing the highest sequential quarterly revenue growth guide in our company’s history, representing 61% year-over-year growth.” He called the growth “otherworldly” in a letter to shareholders. While noting that the Rule of 40 score was 114%, Karp said these results make “undeniable the transformational impact of using AIP to compound AI leverage.” The Rule of 40, a financial metric used to evaluate software-as-a-service (SaaS) companies, is derived by adding the revenue growth rate and profit margin. A reading above 40% suggests good health.

Key Q3 Metrics:

-Adjusted earnings per share (EPS): $0.21 Vs. $0.17 consensus (Fiscal.ai)

-Revenue: $1.18B (up 63% YoY) Vs. $1.09B consensus

Palantir’s U.S. revenue grew 77% YoY and 20% sequentially to $883 million, with U.S. commercial revenue accounting for $397 million and government revenue contributing $486 million. 

The company stated that it closed 204 deals valued at least $1 million, 91 at least $5 million, and 53 at least $10 million. The total contract value increased 151% to $2.76 billion. Signaling a strong outlook, the U.S. Commercial remaining deal value was up 342% YoY to $3.63 billion.

Q4 Outlook

Palantir guided fourth-quarter revenue to $1.327 billion-$1.331 billion, exceeding the $1.180-billion consensus, and adjusted income from operations to $695 million to $699 million. 

The company raised its 2025 revenue guidance to a range of $4.396 billion to $4.40 billion, with the updated range above the average analysts' estimate of $4.163 billion. It raised its U.S. commercial revenue guidance to over $1.433 billion, marking a 104% growth, and also its adjusted income from operations and adjusted free cash flow guidance.

Palantir stock has surged nearly 175% year-to-date.

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