Palantir’s Q3 Report To Test Stock Defensiveness Amid AI Panic — What Analysts Are Expecting

• PLTR hit an all-time high in early October before falling 1.5% during the month, compared with a nearly 7% drop in the Invesco QQQ Trust Series 1 (QQQ).
• Analysts expect Palantir’s Q3 revenue to rise 85%, compared to a 94% rise in Q2.
• Retail sentiment for PLTR has remained ‘bearish.’

Palantir Technology (PLTR) will report third-quarter results after the market closes on Monday, with the stock’s AI durability on the line even as analysts expect a comfortable beat.

Though the stock faced pressure as investors pulled back from AI-linked stocks in October, PLTR's pullback has been less severe. It hit an all-time high in early October before falling 1.5% during the month, compared with a nearly 7% drop in the Invesco QQQ Trust Series 1 (QQQ).

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PLTR remained defensive thanks to its bumper Q2 report, following which the stock gained 30% in a single day in early August. 

Palantir makes software that helps governments and companies run analytics on large amounts of data, with investors watching the company closely as a potential big winner from the AI boom.

Analysts Eye Beat And Raise

Last week, Oppenheimer raised its price target on the stock to $235 from $200, while keeping an ‘Outperform’ rating. The research firm expects another revenue beat and higher annual guidance, and continued strength across the business, including U.S. commercial growth of over 140% and total government growth of more than 65%. 

JP Morgan initiated coverage on PLTR, with an ‘Overweight’ rating and a $262 price target, and added it to the firm’s Focus List.

In a note, the investment bank said it was encouraged by Palantir's improving fundamentals and ability to manage margins at scale, while forecasting healthy uptake in the company’s commercial and government businesses.

Currently, 21 of 32 analysts have a ‘Buy’ or higher rating on the stock, eight rate it ‘Hold’ and three rate it ‘Sell’ or lower, per Koyfin. Their average price target of $212.50 implies an upside of 15% from the stock’s last close.

Palantir: Q3 Results Expectations

Analysts expect Palantir’s Q3 revenue to rise 85% to $2.18 billion, compared to 93% growth in Q2, as per Koyfin. Adjusted profit is expected to rise 94% to $0.41 per share.

Results from enterprise data analytics companies have been mixed so far. Strategy's (MSTR) revenues decreased 2.5% year-on-year, missing analysts' expectations, and Commvault (CVLT) reported revenues up 13.1%, topping estimates. 

Retail View On PLTR

On Stocktwits, the retail sentiment for PLTR was ‘bearish,’ unchanged since last week. 

“$PLTR palantir reports tomorrow into a tape already repricing ai. 9 of the 10 biggest ai names are 10% or more below their 3 month highs. seems like a beat may not be enough anymore,” said a trader.

Another wrote, “Agreed on $PLTR. Monday is not about the beat, consensus already sits above the guide. A gap that cannot hold after the print is a fade.”

PLTR stock has gained 3.6% year to date. 

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