Palantir shares down 36% as Q1 revenue jumps 85%

Palantir Technologies reported first-quarter revenue of $1.6 billion for the period ended March, an 85% increase year over year, while the company’s shares have fallen about 36% from last year’s peak. The results include significant growth in the U.S. business and a rise in large contract activity.

The U.S. business grew 104% in the quarter. Palantir recorded 206 transactions worth at least $1 million and 72 deals of $5 million or more. Total contract value for the period topped $2.41 billion. Third-party estimates cited by analysts project second-quarter revenue of roughly $1.8 billion, about 80% higher than a year earlier, and full-year revenue near $7.7 billion.

Palantir sells three primary products. Gotham is used by government agencies for intelligence and threat analysis. Foundry is a data analytics and predictive-modeling platform used by commercial clients for tasks such as supply-chain and risk management. The Artificial Intelligence Platform, or AIP, allows customers to run large language models and AI agents over proprietary data. The company also operates Apollo, an orchestration engine that deploys and manages software across cloud providers, on-premises systems and classified networks. Annual sales rose from about $1.5 billion in 2021 to $4.47 billion last year.

Analysts adjusted ratings and targets after the quarter. DA Davidson analyst Gil Luria upgraded Palantir to buy and raised his price target to $175 from $165. Wedbush analyst Dan Ives maintained an outperform view. Rosenblatt Securities set a $225 target. Benchmark and BTIG moved to hold or neutral. The stock’s forward price-to-earnings ratio is near 88, and Palantir cites a Rule-of-40 figure of about 145%.

Technical indicators referenced by market participants showed the weekly price around $106, near the 50% Fibonacci retracement measured from the 2022 low to last year’s high. The chart showed a falling wedge pattern and a settlement near the 100-week moving average. Some technical analysts identify $160 as a reference level near the 23.6% retracement.

Market participants identified risks including the stock’s elevated valuation metrics, possible shifts in government procurement budgets, competition in enterprise AI and analytics, and sensitivity to higher interest rates and rotations away from growth and software names. Investors will monitor upcoming quarterly updates, client announcements and execution on AIP and Apollo deployments for information relevant to future revenue trends.