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Palantir Technologies Inc. (NASDAQ:PLTR) delivered its fastest revenue growth since at least 2020 and lifted its full-year 2026 guidance well above Wall Street expectations, yet its shares declined roughly 3% in premarket trading on Tuesday.
“We are raising our full-year revenue guidance to 71% growth, 10 points ahead of our guidance from last quarter, driven by our confidence in an accelerating U.S. market,” said Alex Karp, Co-Founder and Chief Executive Officer.
The company now expects full-year revenue in the range of $7.65 billion to $7.66 billion, up from its previous forecast of $7.18 billion to $7.20 billion and ahead of the $7.2 billion consensus estimate.
Rapid Expansion Led by U.S. Demand
Palantir, known for supplying software, services and AI tools to U.S. government agencies, particularly in defense and military operations, reported first-quarter 2026 revenue of $1.63 billion. This represents 85% year-on-year growth, marking its strongest sales expansion since going public via direct listing in 2020.
The surge was largely driven by the U.S. market, where revenue rose 104% year-on-year. Within this, U.S. commercial revenue jumped 133%, while government revenue increased 84%. The company also closed 206 deals valued at $1 million or more during the quarter.
“Palantir’s Rule of 40 score has soared to 145%. We have shattered the metric, a feat matched only by other fellow AI infrastructure companies: NVIDIA, Micron and SK hynix. Momentum surged as we grew 85% last quarter—our highest-ever year-over-year growth rate—by more than doubling our U.S. business,” Karp added.
Earnings Beat and Upgraded Profit Outlook
Palantir posted adjusted operating income of $984 million, while adjusted earnings per share came in at $0.33, beating estimates of $0.28.
The company also raised its full-year outlook, projecting adjusted operating income of between $4.440 billion and $4.452 billion, alongside adjusted free cash flow of $4.2 billion to $4.4 billion.
Analysts Praise Growth but Flag Valuation Risks
“Palantir delivered another material beat-and-raise, reinforcing its positioning as critical infrastructure layer for enterprise AI,” analysts at Truist Securities said.
Meanwhile, analysts at Jefferies Group acknowledged the company’s strong performance but pointed to valuation concerns as the central issue.
Even assuming revenue reaches around $12 billion in 2027, the stock is trading at roughly 31 times forward enterprise value-to-revenue, which they described as “stretched.”
“We continue to view risk/reward as unfavorable. PLTR’s fundamentals are exceptional, but the stock requires a heroic durability assumption to justify the current multiple,” they noted.
Palantir Technologies stock price
