Palantir falls 12% as analysts raise international growth concerns

Palantir shares dropped greater than 10% Tuesday even after the info analytics and artificial intelligence software company showed ongoing revenue growth acceleration.

“Some investors could also be dissatisfied with the modest full- yr revenue guidance raise, the sequential margin decline, and the international industrial revenue year-over-year decline,” wrote William Blair analyst Louie DiPalma, adding that the corporate’s high software multiple makes it “vulnerable” to compression as revenue growth slows.

Despite the post-earnings move, Palantir topped revenue expectations and lifted its revenue guidance for the yr. The Denver-based company posted adjusted earnings of 13 cents per share on $884 million in revenues. Analysts polled by LSEG had expected adjusted EPS of 13 cents and revenues of $863 million.

Palantir’s revenues rose 39% from $634.3 million within the year-ago quarter. Net income grew to about $214 million, or 8 cents per share, from roughly $105.5 million, or 4 cents per share, a yr ago. The corporate also hiked its full-year revenue outlook to between $3.89 billion and $3.90 billion

CEO Alex Karp said that “Palantir is on fire” and he’s “very optimistic” in regards to the current setup throughout the earnings call after the bell Monday.

“The truth of what is going on on is that that is an unvarnished cacophony — the mixture of 20 years of investment and a large cultural shift within the U.S. which is generating numbers,” he said.

Palantir has outperformed the market this yr, constructing on a successful 2024 run through which the stock was the most effective performer within the S&P 500. Many on Wall Street say the surge in shares has contributed to an elevated multiple for the corporate, making the bar higher and better to clear. To make sure, the stock has undergone immense volatility amid the most recent batch of market turbulence spurred by President Donald Trump’s tariff plans.

“While 2025 numbers move higher on guidance ahead of consensus, we query conservatism and if estimate revisions are priced in from here,” said RBC Capital Markets analyst Rishi Jaluria.

Despite the corporate’s strong execution and fundamentals, Mizuho’s Gregg Moskowitz also said it’s “very difficult to justify” its high multiple. Raymond James analyst Brian Gesuale said that Palantir must consolidate a few of its gains to “grow into its wealthy valuation.”

Wall Street also highlighted a deceleration in international industrial revenues amongst the explanations for the potential decline in shares. The segment fell 5% yr over yr after rising 3% within the previous quarter resulting from headwinds in Europe.

Management said on an earnings call that the region is “going through a really structural change and doesn’t quite get AI.”