Palantir (Nasdaq: PLTR) Down Tuesday. This Is What Wall Street Experts Think About the Stock

Shares of Palantir Technologies (NASDAQ:PLTR) tumbled 12% Tuesday morning after the artificial intelligence data analytics firm handily beat analyst first-quarter revenue and earnings forecasts while also raising its full-year outlook.

While that may seem wrong, considering a beat-and-raise performance is usually followed by rising stock prices, PLTR stock has long carried a premium valuation. That means investors will look for increasingly outsized performance that can justify the higher price tag. So, despite Palantir turning in excellent results, investors wanted more and sent PLTR stock tumbling.

But what does Wall Street think about the AI shop’s performance, and more importantly, where do they think PLTR stock can go in the future?

By the numbers

Palantir Technologies recorded 39% revenue growth to $883.9 million. U.S. revenue jumped 55% year-over-year with commercial revenue surging 71% and government revenue, its largest segment, rising 45%.

Adjusted operating earnings of $391 million, represents 44% operating margin, while adjusted earnings of $0.13 per share soared 63%.

For the coming year, Palantir also raised its guidance. It now expects full-year revenue to be between $3.89 billion and $3.90 billion, up from its previous forecast of between $3.74 billion and $3.76 billion.

Holding the line

Prior to the earnings report, Wall Street was already circumspect about Palantir’s valuation. Of the 24 analysts covering PLTR stock, 16 rated it a hold while five said sell. Only three thought the AI Big Data company was a buy.

They had assigned a consensus $74 per share one-year price target to the stock, which implied 40% downside. Although they liked the business and its position in the industry, Palantir’s valuation had just gotten ahead of itself.

Shares were up 64% year-to-date prior to the earnings report dropping and had rocketed 460% higher over the past year. It was the best-performing large-cap stock on the market during the last 12 months. Since its 2020 initial public offering PLTR has gained over 1,000% compared to a 68% increase by the S&P 500.

High praise

Reuters quotes Morningstar analyst Mark Giarelli as saying, “We believe we have reached a point where respectable earnings beats and raised guidance aren’t enough to materially move (Palantir’s) stock to the upside.”

DA Davidson analyst Gil Luria, who had a hold rating on PLTR and a $100 per share target price, seemed impressed that “Despite recent uncertainty introduced from tariff announcements, Palantir continues to see underlying momentum in the business, landing a record number of $1M deals.”

Palantir reported it had closed 139 deals of at least $1 million, 51 deals of at least $5 million, and 31 deals of at least $10 million.

Goldman Sachs analyst Gabriela Borges maintained her neutral rating on PLTR stock, but did raise her price target ot $90 per share from $80, noting, “We continue to view Palantir as well positioned to continue to deliver best-in-class growth.” Even so, her new, higher price point implies 27% downside. Morgan Stanley‘s Sanjit Singh had similar feelings, telling investors, “Palantir is firing on nearly all cylinders.”

However, Mizuho’s Gregg Moskowitz chose to be a realist. He reiterated his sell rating on PLTR, arguing “valuation cannot and should not be irrelevant.” Even so, he raised his price target on the data analytics stock from $80 per share to $94 per share.

Key takeaway

Most analysts are duly impressed by Palantir Technologies’ ability to go from strength to strength each quarter. No doubt they agree with perma-bull Dan Ives from Wedbush who has long referred to the AI outfit as the “Messi of AI,” referring to Argentine soccer great Lionel Messi. Ives said before earnings Palantir that it remains “one of our top tech names to own.”

Following the earnings report, Ives hiked his price target an analyst high of $140 per share. There may be more downward pressure on Palantir before it makes its move to hit those highs.