Palantir Technologies (NASDAQ: Picture of PLTR) property faced a rare warning from Wall Street after artificial intelligence The software company reported better-than-expected results for the first quarter of 2026.
In particular, on May 4, the company report First quarter earnings of $1.633 billion, up 85% year-on-year and ahead of analysts’ expectations. US revenue rose 104% to $1.282 billion, while the commercial sector jumped 133%.
Adjusted earnings per share came in at $0.33, while GAAP earnings per share were $0.34. Palantir also posted a revised operating margin of 60% and a Rule of 40 score of 145%.
Following the results, the company raised its full-year 2026 guidance to between $7.65 billion and $7.66 billion, representing about 71% year-over-year growth. Palantir also increased its forecast for growth in US retail revenue to 120%.
Despite its strong performance, analysts at Jefferies maintained a ‘Sell’ rating on the stock, arguing that the valuation outweighs the company’s strength. Analyst Brent Hill said the stock’s current valuation looks too high despite strong growth.
The company said that even if Palantir reaches about $12 billion in revenue by 2027, the stock is still trading at about 31 times forward earnings, analysts say it is difficult to justify without long-term growth.
Bullish analytics on PLTR share price
The bearish outlook contrasts with several other Wall Street firms that remained optimistic following the earnings report.
For example, Wedbush Securities analyst Dan Ives reiterated his ‘Outperform’ rating and maintained a price target of $230. Wedbush highlighted Palantir’s strong performance across all revenue metrics for 2026, accelerating AI-driven business demand, and improving profitability.
The company also said it will increase operating income and free cash flow, as well as expand in both the public and commercial sectors. Wedbush expects US sales growth to remain close to 100% in fiscal 2027 as demand for Palantir’s AI products continues to grow.
Some analysts also raised or maintained stock targets following the earnings report. BofA Securities maintained a “Buy” rating with a price target of $255, while Loop Capital reiterated a “Buy” rating and set a $220 price target.
However, some businesses adopted a cautious tone, such as CFRA, which lowered its price target from $203 to $192 despite maintaining a “Buy” rating, while DA Davidson cut its target from $180 to $165 and maintained a “Neutral” rating.
The price of shares PLTR
Meanwhile, following the earnings report, PLTR stock is showing weakness heading into Tuesday. As of press time, Palantir shares were trading at $146, up more than 1% in the last session. However, in pre-market trading on Tuesday, the stock was down 2.8% to $141.
Despite strong earnings, the stock is falling between sell-issue-profits after the recent run and continued concerns about its high valuation, which continues to be priced in on expectations for growth.
