Palantir Reports 63% Q3 Revenue Growth, Stock Dips on Valuation Concerns

Palantir Technologies reported a robust third quarter with revenue hitting $1.18 billion, marking a 63% year-over-year increase fueled by substantial growth in its U.S. commercial segment, which rose 121%, and government contracts. The company raised its full-year revenue guidance to $4.4 billion and projected strong fourth-quarter revenues and operating income, driven by its AI platform adoption and expanding domestic market focus. Despite these impressive financials and record earnings, Palantir's stock experienced volatility, including a premarket drop of over 7%, amid concerns over its extremely high valuation, which trades at a forward P/E exceeding 230, far above typical Big Tech averages. Analysts remain divided, with optimism about AI-driven growth tempered by skepticism regarding the sustainability of its valuation and potential market corrections. Palantir's shares are among the most expensive in the S&P 500 by sales and price-to-earnings ratios, reflecting both strong investor enthusiasm and caution. This tension highlights the balance between Palantir's rapid expansion in AI analytics and market apprehension about its premium pricing.