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Palantir Technologies (NASDAQ:PLTR) reported first?quarter results that beat expectations on U.S. revenue growth but revealed a 10% drop in global sales.
Despite the solid headline numbers, shares of Palantir tumbled roughly 12% in Tuesday morning trading, significantly underperforming the broader market's 0.5% decline.
The sharp drop was triggered by investor concern over a 10% decline in international sales, a signal that global demand may be weakening. This overshadowed the otherwise strong results and highlighted the fragility in investor sentiment.
The software firm posted earnings of $0.13 per share on revenue of $884 million, up 39% year?on?year and driven by a 55% jump in U.S. deals. It then raised its full?year 2025 outlook, citing continued domestic momentum.
Jefferies analyst Brent Thill warned that Palantir's sky?high price?to?earnings ratio of about 650 leaves no margin for error. He described the current valuation as irrational, noting the company must deliver near?perfect execution for years to justify its stock price.
This article first appeared on GuruFocus.