Is It Time to Buy Palantir on the Dip as Revenue Continues to Accelerate?

Core Insights - Palantir Technologies is recognized as a leading artificial intelligence (AI) company, showcasing significant growth in its Q3 results despite a decline in stock price due to high valuation concerns [1][2]. Financial Performance - Palantir's Q3 revenue reached $1.18 billion, exceeding management's guidance of $1.083 billion to $1.087 billion, marking a year-over-year growth acceleration from 13% in Q2 2023 to 63% in Q3 2023 [3][4]. - U.S. commercial revenue surged 121% to $397 million, with remaining deal value increasing by 199% to $3.63 billion, and total contract value for U.S. commercial deals rose 342% year-over-year to $1.31 billion [4][5]. - Government revenue climbed 55% year-over-year to $633 million, with U.S. government revenue increasing by 52% to $486 million, driven by demand for AI solutions [6]. Profitability Metrics - Adjusted earnings per share (EPS) rose from $0.10 to $0.21 year-over-year, surpassing the analyst consensus of $0.17, while adjusted EBITDA increased by 51% to $606.5 million [7]. Future Outlook - The company forecasts Q4 revenue between $1.327 billion and $1.331 billion, indicating a 61% growth at the midpoint, and raised its full-year revenue guidance to a range of $4.396 billion to $4.4 billion, representing 52% growth [8]. - U.S. commercial revenue is expected to grow by at least 104% [8]. Market Position - Despite a recent stock price drop, Palantir's stock is still up over 150% year-to-date and over 350% in the past 12 months, but it trades at a high forward price-to-sales (P/S) ratio of about 81 times the 2026 analyst consensus [2][9]. - The company is positioned as a critical player in AI, particularly with its Artificial Intelligence Platform (AIP), which is gaining traction among large language models for real-world applications [10]. Technological Advancements - Palantir is leveraging its AI Hivemind technology to orchestrate AI agents for solving complex problems, with commercial customers already utilizing it to address supply chain issues [11].