Palantir (PLTR) shares are sliding in after-hours trading even after the tech company raised its full-year guidance. RBC Capital Markets Software Equity Analyst Rishi Jaluria joins Yahoo Finance to break down Palantir's first quarter earnings and the market's reaction amid an artificial intelligence race.

Palantir topped its first quarter sales expectations yet saw a decrease in US commercial growth from 70% to 40%. Jaluria attributes the slow US commercial growth to Palantir's status as an "over-hyped generative AI beneficiary company," pointing to mixed messaging around its artificial intelligence capabilities and skepticism over its boot camp strategy.

"Everyone wants to play the AI game...I just don't think Palantir is that cutting-edge generative AI company that they claim it to be," Jaluria warns, pointing to more established tech companies like Microsoft (MSFT) as a stronger option.

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This post was written by Melanie Riehl