Key Highlights

  • Palantir fell 6.27% to $184.11 on October 30, 2026.
  • Palantir reports third-quarter results on Monday, November 2.
  • Second-quarter Revenue rose about 93% to roughly $1.94 billion.
  • RBC reiterated an Underperform rating with a $90 price target.

What pushed Palantir Technologies (NASDAQ:PLTR) down 6.27% on Friday was less about the company itself than about the market around it. The Data Analytics and AI software company closed at $184.11, down from $196.42, after touching an intraday low of $180.81, according to market data. Volume ran at about 1.3 times its normal level. The drop came on a day when investors sold technology stocks broadly, and it came just three days before Palantir's third-quarter report on Monday, November 2, a combination that tends to encourage profit-taking in a stock priced for perfection.

A risk-off day for tech

Friday's session was harsh. Market reports said the Nasdaq Composite fell 2.84% and the S&P 500 lost 1.83%. Intel (NASDAQ:INTC) suffered its worst day since 1974 after a weak fourth-quarter forecast, and disappointing results from Amazon (NASDAQ:AMZN) fed worries about the returns on huge AI spending. One analyst, Daniela Hathorn, said "strong AI Demand is no longer enough on its own," arguing that companies must now show their investments produce revenue growth, margins and free cash flow. Software was not spared either: Reddit (NYSE:RDDT) fell about 29%, with commentary suggesting AI is eating into some software businesses.

Market reports tied Palantir's decline to that broader tech weakness, interest-rate uncertainty and renewed concerns about an AI bubble, which prompted traders to lock in gains before earnings. Notably, the drop came a day after JPMorgan (NYSE:JPM) initiated coverage with an Overweight rating and a $262 price target. Even a fresh bullish call from a major bank was not enough to hold the shares up on Friday.

A bearish note from RBC

Earlier in the week, RBC Capital analyst Rishi Jaluria reiterated an Underperform rating and a $90 price target. According to market reports, RBC estimates that Palantir trades at roughly 61 times 2026 revenue and 40 times 2027 revenue on an enterprise-value basis, the most expensive name in the firm's software coverage. RBC said tracker data showed a sequential slowdown in government contract value, and channel checks raised doubts about the durability of commercial growth. Palantir shares fell about 2% that morning.

What Palantir does

Palantir sells software that helps governments and companies combine and analyze large amounts of data and act on it. Its older platforms, Gotham and Foundry, serve defense, intelligence and commercial customers, while its Artificial Intelligence Platform, known as AIP, lets organizations put large language models to work on their own data and operations. The company has become one of the most visible beneficiaries of corporate interest in AI, and its U.S. commercial Business has grown fastest.

Results and guidance

The second quarter, reported on August 3, was exceptional by any measure. Revenue rose about 93% from a year earlier to roughly $1.94 billion, beating expectations of $1.81 billion, and adjusted Earnings of $0.41 per share topped the $0.34 forecast. According to market reports, U.S. commercial revenue jumped 149% to about $764 million and U.S. government revenue rose 90% to about $809 million. The adjusted operating Margin was about 62%, and the company's Rule of 40 score, which adds revenue growth to profit margin, reached 155%.

Deal activity was also strong. Market reports said Palantir closed 220 deals worth at least $1 million in the quarter, including 98 of at least $5 million and 73 of at least $10 million, and that total contract value reached about $3.4 billion, up 49%. Total U.S. revenue grew about 115% to roughly $1.6 billion, showing how heavily the growth is concentrated in the company's home market. Chief executive Alexander Karp described the quarter as "otherworldly" and linked the results to demand for what he calls AI sovereignty.

Management raised its full-year outlook to revenue of about $8.15 billion to $8.16 billion, U.S. commercial revenue above $3.4 billion and adjusted free Cash Flow of $4.5 billion to $4.7 billion. For the third quarter, Palantir guided revenue of $2.160 billion to $2.164 billion and adjusted Operating Income of $1.292 billion to $1.296 billion. Market reports noted the midpoint implies about 11.7% sequential growth, and analysts expect year-over-year revenue growth of about 84%.

Valuation

Valuation is the central debate. Market data puts Palantir's trailing price-to-earnings ratio at 156.89, compared with 27.26 for Microsoft (NASDAQ:MSFT), 20.49 for Oracle (NYSE:ORCL) and 25.87 for Nvidia (NASDAQ:NVDA). Even after Friday's decline, the stock remains well above its 200-day Moving Average of $153.88, according to market data. For bulls, extraordinary growth and margins justify an extraordinary multiple. For bears, the price already assumes years of flawless execution.

The bull case

The optimists have plenty of data on their side. Revenue nearly doubled in the second quarter, margins are high and rising, and the company holds about $9 billion in cash, according to RBC. Wall Street targets have generally moved higher: market data lists Citigroup (NYSE:C) at $250 with a Buy rating, Baird at $250, DA Davidson at $250 with a Buy, Oppenheimer (NYSE:OPY) raised to $235 from $200, and JPMorgan's new $262 target. A strong third quarter and another guidance increase could quickly reverse Friday's decline.

The bear case

The skeptics point to a valuation that leaves little margin for error, signs of slowing in government contract trackers, and questions about how durable commercial demand will be, all raised by RBC. Morgan Stanley (NYSE:MS) rates the stock Hold with a $205 target, citing valuation, and the consensus target of $208.60 sits only modestly above Friday's close. Insider selling has also drawn attention: chief executive Alexander Karp sold 492,348 shares in August at an average price of $174.79 under a pre-arranged trading plan, market data showed. With a Beta of 1.60, the stock tends to swing more than the market in both directions.

Monday's Report Will Set Direction

Everything now points to Monday's report. Investors will look at whether revenue beats the $2.16 billion guidance by the wide margins they have grown used to, how fast U.S. commercial revenue is growing, whether government contract momentum is slowing as RBC suggests, and whether management raises its full-year targets again. Comments on AI demand, deal sizes and capital returns could also move the stock. With the shares already volatile and the market nervous about AI spending, the reaction to the report could be large in either direction.