Palantir shares slipped lower in early Wednesday trading, but remain firmly in the green for the month, after a top Wall Street analyst issued an updated note tied to the data analytics group's newly- released annual report.
Palantir (PLTR) shares have continued to outperform both their sector peers and the broader market benchmarks this year, with a 65% gain for 2025 powered in part by a stronger-than-expected fourth quarter earnings report and a solid near-term outlook.
The Denver group, founded by the tech investors Peter Thiel and Joe Lonsdale and run by CEO Alex Karp, forecast 2025 revenue in the region of $3.75 billion, up 30% from 2024, while pledging to boost its nongovernment sales past $1.8 billion.
Palantir uses its artificial-intelligence platform, known as AIP, to help clients pull together disparate collections of data into a single model that they then can build, train and deploy in their day-to-day processes.
The group also benefits from its ontology offering, a framework that helps represent and connect real-world entities, data and processes for its commercial clients.
Palantir generated adjusted earnings of just under $1.16 billion last year, with a profit margin of around 40%, and expects a 2025 tally of around $1.56 billion.
Jefferies analyst Brent Thill, however, picked through Palantir's Securities and Exchange Commission Form 10-K annual report and reiterated an underperform rating for the stock over the next 12 months.
Palantir headcount growth in focus
The analyst carries a $60 price target on the shares, which he doubled from $28 following its fourth quarter report earlier this month.
Thill noted that headcount growth for the group slowed last year — to 5% compared with 2023 levels — and he asked whether management is "investing enough in the AI opportunity ahead."
"We believe this could mean one of three things," said Thill. "Palantir's AI opportunity ahead is not as big as is priced in; its engineering/technical hires are being offset by reductions elsewhere (international headcount headcount decreased by 87 from 2023 to 2024 despite overall headcount increasing by 201), or the company overhired 2 years ago."
Related: Analysts overhaul Palantir stock price targets after earnings
Thill also noted the flat non-U.S. revenue growth for the group, which is unashamedly pro-American in its shareholder communications, noting that while U.S. sales were up 38% last year, international revenue has grown only 14% over the past two years.
Karp: we are 'very long on the U.S.'
"We believe we are making America more lethal, making our adversaries increasingly afraid of acting against the interests of America and especially Americans," Karp told investors on a conference call earlier this month.
"And we are proud of our moral stance, and we are very long on the the U.S. and what is happening and what will happen in the future."
Positive takeaways from Palantir's 10-K, Thill said, were tied to the group's exposure to its top three clients, likely all within the U.S. Department of Defense, which accounted for 17% of overall revenue in 2024 compared with 18% in 2023.
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Thill said the "slight downtick" in exposure is a "step in the right direction in terms of reducing customer concentration risk."
"The company continues to add new logos at an increasing rate, adding 214 net new customers in 2024 (vs. 130 added in 2023) and bringing the total customer count to 711," Thill said.
Palantir shares were marked 0.9% lower in premarket trading to indicate an opening bell price of $123.60 each.
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