Newsquawk Analysis: Palantir (PLTR), what’s the story?

Analysis details (13:20)

• In earnings after-hours on Monday, Palantir surpassed Wall St. expectations on the top and bottom line, alongside impressive Q4 and FY revenue guidance. Despite this, one of the big AI bellwethers is tumbling around 7.5% in pre-market trade, with many citing elevated valuation, but many still see many reasons to be optimistic:


• PLTR shares +174% YTD, +66.70% last 6-months, +19.71% the last month, and +9.51% the last 5 days.


• Given the pullback in PLTR shares after a solid report, other sectors with stretched valuations have also taken a hit, including Uranium/Nuclear power stocks (URA -3.5%, NLR -3.7% in pre-market trade. Rare Earth stocks are also lower, with the VanEck Rare Earth and Stgc Metals ETF lower by 2.6% in London trade.

BULLISH:

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  PT raised to USD 188 (prev. 141) at Goldman Sachs and keeps a Neutral rating on shares; says the Co. is one of only a handful of software Cos. that is clearly benefiting from AI deployments today.


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  PT raised to USD 205 (prev. 165) at UBS and keeps a Neutral rating on shares; notes growth is set to accelerate again in Q4.


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  PT raised to USD 255 (prev. 215) at BofA and keeps a Buy rating on shares; says while others continue to push a "blue pill" option of generic, one-size-fits-most, Chat-GPT wrappers, Palantir's "red pill" boot camps, an expensive software kit, an Ontology implementation path that prioritises ROI, and the ability to scale with AI FDEs offers "a winning differentiated formula". BofA’s raised PT reflects confidence in Palantir's "enduring position and better than expected growth".


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  PT raised to USD 205 (prev. 165) at Mizuho and keeps a Neutral rating on shares; states PLTR’s recent execution "has been stunning, with material upward revisions across Commercial and Government."

BEARISH:

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  Bloomberg quips that it is not as if Palantir poses any sort of systemic risk to the US economy, but it does have the highest price-to-sales ratio on the S&P 500 (as of Friday) and may be viewed as a microcosm for the broader US equity market as Wall St. CEOs grow increasingly concerned by stretched valuations and warn of a potential correction.


• In his latest 13F, Michael Burry has bet against the AI rally - he has bought 5mln put options on Palantir shares, and 1mln puts on NVIDIA, which has seen “The Big Short” shorting the two hottest AI infrastructure plays.


• On earnings, which were undoubtedly solid, RBC notes that while profitability remains strong, RBC sees limited visibility into normalised growth once these early AIP (artificial intelligence platform) deployments mature. RBC remains ‘Underperform’ rated given an increasingly concentrated growth profile, elevated valuation, and limited visibility into sustainable AIP demand.


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  PT raised to USD 70 (prev. 60) at Jefferies and keeps an Underperform rating on shares; notes PLTR’s US demand is "booming" and the Q3 results "were strong", but Jefferies views the valuation of Palantir shares as "extreme", and while it likes the Cos. fundamentals it sees an unfavourable risk/reward.


• Increased PT (as above), but Goldman Sachs continues to expect Palantir to capture meaningful share of customer AIP deployments, its positive view is balanced by longer term ecosystem risks and premium valuation.


• Increased PT (as above), but Mizuho believes Palantir’s multiple of 64-times estimated 2027 revenue "remains extreme, dramatically above anything else in software."

EARNINGS RECAP:

• Record Q3 results underscored strong AI-driven growth and broad enterprise adoption, but investor enthusiasm cooled as the firm’s valuation and growth trajectory prompted caution, seeing its shares slip by over 6.5% in extended trading. Management’s bullish tone on retail participation and expanded AI offerings contrasted with market concerns over slowing momentum and sustainability of recent contract-driven gains, reports suggested. Q3 2025 (USD): EPS 0.21 (exp. 0.17), Revenue 1.18bln (exp. 1.09bln). Guidance: Q4 revenue 1.327-1.331bln (exp. 1.19bln), Adj. income from operations 695-699mln. FY revenue 4.396-4.400bln (exp. 4.15bln), Adj. income from operations 2.151-2.155bln.

04 Nov 2025 - 13:20- ForexResearch Sheet- Source: Newsquawk