Defense Deals and Q1 Beat Can’t Stop PLTR Stock from 10% Crash
Despite reporting outstanding first-quarter earnings and riding a nearly 90% surge over the previous month, Palantir Technologies' stock...
Quick overview
- Palantir Technologies reported strong Q1 earnings, with revenue rising 36% year-over-year to $862.3 million and EPS of $0.13, meeting expectations.
- Despite solid results and optimistic guidance for Q2 and full-year 2025, Palantir's shares fell nearly 10% in after-hours trading due to cautious forward outlook.
- The company's stock had previously surged nearly 90% over the past month, driven by excitement around AI initiatives and government contracts.
- Investors appear to be locking in profits after the recent rally, leading to a swift correction despite the overall bullish outlook.
Despite reporting outstanding first-quarter earnings and riding a nearly 90% surge over the previous month, Palantir Technologies’ stock fell as cautious forward guidance dampened market enthusiasm.
A Record Close Meets a Sudden Reversal
Heading into its Q1 earnings release, Palantir (NYSE: PLTR) was on a roll. The stock closed last week at $124, marking its highest weekly finish ever and coming within reach of its all-time high of $125.41. After rebounding sharply from a low of $66.12 in early April, PLTR surged nearly 88% over four weeks, fueled by excitement around its artificial intelligence initiatives and expectations of strong government contract performance.
PLTR Chart Daily – Failing to Make New Record Highs 
But, today we are seeing a dive which has taken the PLTR share price below $113, which means we will see a massive bearish gap at the US stock market open tomorrow.
Q1 Delivers, But Market Shrugs
The company’s Q1 report did not disappoint on the surface. Revenue rose 36% year-over-year to $862.3 million, comfortably beating expectations. This surge was largely driven by Palantir’s growing portfolio of AI-driven solutions and major government deals, including a headline-grabbing multi-billion dollar contract with NATO. EPS also came in strong at $0.13, exceeding analyst estimates and reflecting the company’s increasing operating efficiency.
Palantir Q1 Earnings – Meets EPS, Beats Revenue and Guidance but Slips in After-Hours Trading
Key Points:
- Q1 Earnings Per Share (EPS): Reported EPS came in at $0.13, exactly in line with Wall Street estimates.
- Q1 Revenue: Palantir posted $884 million in revenue, comfortably beating the consensus estimate of $861 million, signaling strong client retention and growth.
- Q2 Guidance: Management projects Q2 revenue between $934 million and $938 million, exceeding analysts’ expectations of $898 million.
- Full-Year 2025 Outlook: The company raised its full-year revenue guidance to $3.89–$3.90 billion, significantly above the projected $3.75 billion, reflecting confidence in long-term growth, particularly in AI and government sectors.
- Stock Reaction: Despite solid results and an optimistic forward view, Palantir shares dipped 10% in after-hours trading, likely due to high investor expectations already priced in after recent strong gains.
Guidance Sends Investors Running
Yet despite these solid numbers, Palantir’s stock took a sharp hit in after-hours trading, falling nearly 10% to around $112.62. The decline appears to be driven by a more cautious Q2 outlook, which, while still positive, failed to live up to the sky-high expectations baked into the stock after its parabolic climb. With much of the good news already priced in, even a hint of moderation was enough to trigger a swift correction.
Conclusion: Can Palantir Survive Without Defense Funds?
Palantir Technologies delivered a solid Q1 with results that matched or exceeded expectations across the board. Strong guidance for Q2 and full-year 2025 confirms robust momentum in both commercial and government sectors. However, the slight dip in after-hours trading suggests investors may have been expecting an even stronger beat or are locking in profits after the stock’s sharp run-up in recent weeks. Despite the pullback, the outlook remains firmly bullish with continued AI and defense contract tailwinds.
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