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Palantir (PLTR) stock is red hot to end the week, touching a new all-time intraday high of $85.22 on Jan. 31. This comes as investors anticipate its fourth-quarter earnings release on Monday, Feb. 3.
Artificial intelligence (AI) stocks including Palantir have been on a wild ride in recent days. These companies have outperformed over the past year, soaring on demand for the new technology. However, news that a Chinese startup DeepSeek created AI models that rivaled its U.S. counterparts at a fraction of the cost sent AI stocks plunging. Palantir shares fell roughly 4.4% on Monday, while Nvidia (NVDA) shares fell nearly 17%. The next big catalyst for Palantir will be its earnings release, and investors will be watching to see if the company can justify its premium valuation.
About Palantir Stock
Denver-based Palantir (PLTR) specializes in big data analytics, using artificial intelligence to help commercial and government clients make decisions. Its tools include Foundry, Gotham, and its Artificial Intelligence Platform (AIP). The company is currently valued at a market capitalization of $185 billion.
Fueled by AI demand, shares have gained 393% over the past 52 weeks, vastly outperforming the 24% gain in the S&P 500 Index ($SPX). Shares are up 9% so far in the year to date.
With a forward price-earnings ratio above 260x, Palantir is much more expensive than its peers. A trailing price-sales ratio above 70x dwarfs the industry average of 3x. Investors betting on the company have done so based on its AI relevance and their expectations for its continued growth.
Palantir Beats on Q3 Earnings
Palantir reported its third-quarter results on Nov. 4 and beat analyst estimates for both revenue and earnings per share. Revenue grew 30% year over year to $726 million, above the $701 million that analysts expected. Earnings per share of $0.10 also beat the $0.09 estimate.
For the fourth quarter, the company is guiding for revenue between $767 million and $771 million, and adjusted income from operations between $298 million and $302 million. Analysts expect Q4 revenue of $776 million and earnings per share of $0.05, up nearly 70% year over year. Adjusted earnings per share are expected to come in at $0.11.
Highlights from its Q3 report covered its inclusion in the S&P 500, its work with the Ukrainian government to de-mine territory, and a five-year, $100 million contract with the U.S. military for artificial intelligence and machine learning. Investors will be closely watching for commentary on its new commercial and government contracts as well as its outlook for 2025. Commercial revenue, a key growth area for the company, was up 55% in the U.S. for Q3. Investors will also be looking for comparable year-over-year growth in commercial revenue for Q4.
Palantir next reports earnings on Monday, Feb. 3.
What Do Analysts Expect for Palantir Stock?
Analysts are currently cautious on Palantir stock with a consensus “Hold” rating. Of the 18 analysts in coverage, two have a “Strong Buy” rating, nine “Hold” ratings, two “Moderate Sell” ratings and five “Strong Sell” ratings.
Analysts have a mean price target of $47.29, far below its current trading price above $80. However, the Street-high price target of $90 implies roughly 9% upside potential over the next few months. Depending on how Palantir’s earnings land, analysts could re-rate shares in coming weeks. Right now, their “Hold” rating and average price target suggest that investors would be better off staying on the sidelines with Palantir’s stock.
