Palantir (PLTR) stock fell as much as 8% premarket Tuesday as investors scrutinized the company’s valuation and declining sales to international businesses, even as its first quarter earnings blew past Wall Street’s forecasts.
Jefferies analysts Brent Thill wrote in a client note Tuesday morning that, “While fundamentals have strengthened in recent quarters, PLTR’s valuation at 56x CY26E rev [56 times its 2026 calendar year revenue] has risen to unprecedented levels.” Thill called Palantir’s valuation “irrational.”
Palantir’s results released late Monday largely topped Wall Street expectations.
Palantir’s overall revenue $884 million for the March quarter was ahead of the $863 million expected by Wall Street analysts, according to Bloomberg data. Its earnings per share of $0.13 were in line with forecasts.
Palantir stock was up over 60% this year ahead of Monday’s release; in the last month alone the stock had gained over 65%.
The company raised its financial outlook for 2025 revenue to a range between $3.89 billion-$3.9 billion, up from its prior estimate of $3.75 billion. That prior outlook also surpassed Wall Street projections at the time.
The firm’s increasingly optimistic financial outlook for the year was driven by its US commercial segment, which sells software to medical providers like Mount Sinai and Cleveland Clinic, oil companies such as BP (BP) and Exxon (XOM), automakers such as Stellantis (STLA), and more.
Palantir’s US commercial revenue jumped 71% to $255 million in the first quarter, ahead of the $239 million projected by Wall Street analysts tracked by Bloomberg.
Still, its revenue from international businesses missed estimates, with revenue from that segment hitting $142 million in the first quarter, lower than the $160 million expected and marking a 10% decline from the prior year.
“We have a $1 billion run rate in US commercial now, which is the gold standard for when a company has really broken through,” CEO Alex Karp told Yahoo Finance’s Josh Lipton Monday.
Palantir now expects its commercial business to grow 68% this year, reaping $1.18 billion in revenue in 2025, up from the firm’s prior estimate of $1.08 billion, or 54% growth, for that segment.
Palantir’s data analytics and AI software is also used by militaries, government agencies, and police departments to the chagrin of human rights advocates and critics. It’s used to do everything from war planning and surveillance to supply chain management.
Palantir’s first quarter US government sales soared ahead of expectations, with revenue from US government contracts jumping 45% to $373 million, more than the $358 million expected.
