Palantir stock falls nearly 8% on valuation fears after results top Wall Street estimates

Core Insights - Palantir's stock fell 7.95% despite reporting strong quarterly results, raising concerns about its high valuation [1] - The company provided fourth quarter revenue guidance of over $1.3 billion, exceeding Wall Street's expectation of $1.2 billion [2] - Palantir raised its full-year revenue guidance to $4.4 billion from $4.15 billion, with a year-to-date stock increase of over 150% [2] Financial Performance - Palantir reported third quarter revenue of $1.18 billion, a 63% increase year-over-year, surpassing the expected $1.09 billion [7] - The adjusted earnings per share for the third quarter were $0.21, exceeding the expected $0.17 and more than doubling the EPS of $0.10 from the same quarter in 2024 [6] - Revenue from US government contracts increased by 52% to $486 million, while the US commercial segment saw a 121% year-over-year increase to $397 million [8] Valuation Concerns - Analysts expressed concerns that Palantir's performance and guidance do not justify its high valuation, with a forward price-to-earnings ratio of 230 compared to 35 for major tech stocks [3] - Jefferies analyst Brent Thill noted that the current valuation is vulnerable to fluctuations in the AI hype cycle, maintaining an Underperform rating on the stock [4]