Palantir Stock Drops 9% Despite a Stellar Earnings Report Featuring 71% U.S. Commercial Revenue Growth
U.S. enterprise demand is voracious for the company's artificial intelligence (AI)-powered software platforms.
Palantir Technologies (NASDAQ: PLTR) stock dropped 9.3% in after-hours trading on Monday following the artificial intelligence (AI)-powered data analytics company's release of its earnings report for the first quarter of 2025.
It's safe to assume the main reason for the stock's decline was that the quarter's earnings "only" met Wall Street's consensus estimate. Granted, earnings growth was great, but simply meeting analysts' expectations is not usually good enough to prevent a post-earnings decline for a stock with a sky-high valuation. In other words, extremely high earnings growth expectations were already priced into Palantir stock.
Going into the release, Palantir stock was trading at 238 times estimated earnings for the forward one-year period. For some context, shares of Nvidia, the leading AI chipmaker, and Broadcom, the leader in custom AI chips, were trading at 26 and 31 times forward projected earnings, respectively.
