Palantir (NYSE: PLTR) has been a surprisingly contentious stock in the last two months. On the one hand, it experienced a remarkable stock market rally, and on the other, it had investors and experts nervous, as many of them estimated that the upcoming business growth was already reflected in the share price.
However, the technology giant’s latest earnings may have blown the more conservative estimates out of the water. Palantir not only beat revenue – it reported $726 million instead of the predicted $701 million – and earnings-per-share (EPS) – the company also reported $0.10 instead of the expected $0.09 – forecasts, but also offered particularly strong guidance.
Indeed, Palantir called for fourth-quarter revenue of $767-$771 million – some $40 million above the consensus $741.4 million – largely thanks to heightened artificial intelligence (AI) demand, including from the government clients.
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We absolutely eviscerated this quarter, driven by unrelenting AI demand that won’t slow down.
Alex Karp, Palantir CEO
Considering the results and the guidance, it is hardly surprising that investors had an overwhelmingly positive reaction to the report. After declining 1.22% in the November 4 session to their latest closing price of $41.41, PLTR shares rocketed 14.42% in the extended session and, at press time, stand at $47.38.
Analysts remain bearish about PLTR shares despite strong earnings
As impressive – and above expectations – Palantir’s quarterly results proved, the initial analyst reactions to the report might be even more surprising.
Indeed, both William Blair analysts and Mizuho Securities’ Gregg Moskowitz opted to maintain their ‘sell’ ratings for PLTR shares.
Moskowitz’s argument, however, proved interesting. The expert was impressed by the published numbers and believes that Palantir should be valued at a premium, but nonetheless considers that trading at 33 times the calendar year 2025 revenue forecasts is simply too high.
Still, at least one prominent Wall Street analyst – Wedbush’s Dan Ives – reacted as positively to the report as the investors. The expert – long bullish about PLTR to the point of calling the company the ‘Messi of AI’ in reference to a soccer legend – revised his positive rating by raising the 12-month price target to $57.
Finally, it will be interesting to see how Palantir stock trades through the rest of November and how other Wall Street analysts react to the earnings, as it appears unlikely that the current average price target – as seen on TipRanks on November 5 – will hold.
At press time, four experts rate PLTR as a ‘buy,’ seven are neutral, and five consider selling to be the right call. Overall, Palantir shares are expected to collapse 29.97% from their latest closing price and land at $29 in the coming 12 months.
