Palantir Technologies Inc. (NYSE:PLTR) shares dropped 9.19% in pre-market trading on Tuesday, despite the data analytics company raising its revenue forecast on strong demand for artificial intelligence products.
What Happened: Wedbush Securities analyst Dan Ives defended the company’s stock on CNBC, calling Palantir “the Messi of AI” and predicting a trillion-dollar market cap within three years.
“They are leading when it comes to AI revolution,” Ives said. “If you look at the bears, they hate it at 30, despise it at 50, absolutely say it’s expensive at 100, 125.”
Palantir “is a core AI Revolution gem to own over the coming years,” Ives wrote on X.
The company reported first quarter revenue of $883.86 million, beating analyst estimates of $862.83 million, with earnings of 13 cents per share meeting expectations. U.S. commercial revenue surged 71% year-over-year while the customer count grew 39%.
Jefferies analyst Brent Thill, maintaining an underperform rating, acknowledged the strong fundamentals but questioned the sustainability of Palantir’s valuation at 65 times revenue.
“There’s not a single software stock that we’ve ever covered that trades at this multiple and sustained it,” Thill noted, pointing to historically lower multiples at companies like Snowflake Inc (NYSE:SNOW).
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Why It matters: Ives countered that valuation-focused investors “missed every transformational tech stock last 20 years,” adding that institutional investors have been “way wrong” while retail investors recognized the company’s potential.
Fundstrat‘s Mark Newton supported the bullish view on X, noting the “post-close weakness has not violated uptrend” and that PLTR “remains attractive on weakness.”
CEO Alex Karp cited a “tectonic shift” in adoption, raising full-year revenue growth guidance to 36% and U.S. commercial revenue growth to 68%, describing the growth as “surging and ferocious.”
Price Action: Palantir stock closed at $123.77 on Monday, down 0.41%. In pre-market trading on Tuesday, the stock dropped 9.19% to $112.40. Year-to-date, it’s up 63.65%, and 390.96% over the past year, according to data from Benzinga Pro.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
