Palantir Technologies Earnings Review: Buy the Dip?

Core Insights - Palantir Technologies reported strong quarterly results, beating expectations on both earnings and revenue, with adjusted earnings of $0.21 per share and revenue of $1.18 billion [1][2] - Total revenue increased by 63% year-over-year, marking the second consecutive quarter above $1 billion, while net income more than tripled to $475.6 million [2] - Despite the strong performance, valuation concerns persist, with the stock trading at over 100x sales and approximately 400x earnings, significantly higher than competitors like Nvidia and Vertiv [3][10] Financial Performance - Adjusted earnings were $0.21 per share, exceeding the consensus estimate of $0.17 [1] - Revenue rose from $725.5 million to $1.18 billion, a 63% increase year-over-year [2] - Net income increased to $475.6 million, or $0.18 per share, compared to $143.5 million, or $0.06 per share, a year earlier [2] Valuation Concerns - The stock's valuation is a key concern, trading at over 100x sales and roughly 400x earnings, which is significantly higher than other AI leaders [3] - Nvidia and Vertiv are trading at 46x forward earnings, which is considered elevated but more reasonable compared to Palantir [3] Market Dynamics - The current pullback in Palantir's stock may present a tactical buying opportunity for momentum-oriented investors [4][11] - The stock recently broke out from a multi-month bull flag, confirming a strong uptrend, although it has pulled back approximately 7% following the earnings release [5][6] - Buyers have entered around the prior resistance zone, which is now acting as support, indicating favorable entry points for investors [6][7] Investment Considerations - For investors looking to initiate or add to a position in PLTR, the $185 support zone could serve as a risk marker [7] - Alternatives like Vertiv and Nvidia offer exposure to the AI theme at more moderate multiples for valuation-sensitive investors [12] - Palantir remains a compelling high-beta play in the AI ecosystem for those comfortable with momentum and volatility [12]