TLDR
- Palantir reported Q1 2026 revenue of $1.63B, up 85% year over year, beating estimates
- EPS came in at $0.33 adjusted; full-year guidance raised to $7.65–$7.66B
- Government revenue hit $687M, beating estimates; U.S. commercial revenue of $595M missed
- PLTR stock dropped ~7%, trading near $136, now 23% lower year to date
- Valuation remains a concern with a trailing P/E of 232x and price-to-sales of 78x
Palantir (PLTR) dropped around 7% on Tuesday after reporting a strong Q1 2026 earnings beat, as investors focused on a commercial revenue miss and the stock’s stretched valuation.
Palantir Technologies Inc., PLTR
The stock was changing hands near $136 in midday trading, putting it below both the 50-day moving average of $145.40 and the 200-day moving average of $164.26. It’s now 23% lower year to date and well off its 52-week high of $207.52.
Q1 revenue came in at $1.63 billion, up 85% year over year, beating Wall Street estimates. Adjusted EPS was $0.33. Management raised full-year guidance to $7.65–$7.66 billion.
That’s eight straight quarters of beating both EPS and revenue estimates. Not many companies can say that.
Government Strength, Commercial Miss
Government revenue was the standout, hitting $687 million and clearing estimates of $610.5 million by a wide margin.
The problem was on the commercial side. U.S. commercial revenue of $595 million came in lighter than expected, and that was enough to shift sentiment quickly after the report dropped.
Palantir had guided for U.S. commercial revenue to grow at least 115% in fiscal 2026. In Q4 2025, that segment had grown 137% year over year to $507 million, so the bar was already set high.
CEO Alex Karp had previously called Palantir’s Rule of 40 score “an incredible 127%,” describing the company as an “n of 1.” The earnings report did nothing to walk that back.
The Valuation Problem
Even with the strong growth numbers, the stock is trading at a trailing P/E of 232x, a forward P/E of 112x, and a price-to-sales ratio of 78x.
Peers like Snowflake, ServiceNow, and Microsoft carry rich multiples too — but none are trading at Palantir’s price-to-sales premium.
That gap is what bears were pointing to on Tuesday, even as broader sector sentiment was otherwise constructive.
Rosenblatt maintained a bullish $225 price target, citing Palantir’s ontology as a key infrastructure layer for enterprise AI. The Wall Street consensus target sits at $180.68.
Analyst ratings are split: 19 Buy ratings, 10 Holds, and 2 Sells. Insider activity has leaned toward selling, with 72 recent transactions in the net selling direction.
Polymarket traders had actually priced in a 99% probability of a down day for PLTR on May 5, even before the earnings hit — a rare case where the market read the reaction before it happened.
Reddit sentiment nudged from neutral to bullish following the beat, with a score of 60. But the broader composite sentiment index sat at 57.01, with a 7-day decline of 5.54 points.
The $130 level has been flagged as a key support line to watch into the end of the week.
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