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Today's Exclusive News
Palantir's Critics Are "Right"—But They're Also Still WrongSubmitted by Chris Markoch. Published: 5/14/2026. 
Key Points
- Palantir posted 85% revenue growth and raised full-year guidance, reinforcing its leadership in enterprise AI software.
- Critics continue to focus on valuation, but PLTR stock has repeatedly rewarded investors despite those concerns.
- Analysts and institutional investors are still increasing exposure to Palantir as the stock consolidates after earnings.
- Special Report: The Biggest IPO Ever: Claim Your Stake Today
Palantir Technologies (NASDAQ: PLTR) is down just over 10% since its May 4 earnings report as of the May 13 close. The earnings report was exceptional on every level, but it wasn’t enough to convince the company’s skeptics to push the buy button. In fairness, there’s a lot of noise surrounding Palantir that has nothing to do with the earnings report. The stock initially dropped on concerns over the impact artificial intelligence (AI) would have on software stocks.
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That’s a legitimate macro conversation. However, it assumes that Palantir is a passive software company waiting to be disrupted. In reality, this is the company doing the disrupting, and it continues to do just that on both the government and commercial sides. What the Earnings Actually SaidThe Q1 2026 results were historically strong. Palantir posted revenue of $1.63 billion, an 85% year-over-year increase and its fastest top-line growth since the company’s 2020 direct listing. The quarter marked the company's 11th consecutive period of revenue acceleration. That’s a streak that most large-cap software companies can't come close to matching. U.S. revenue crossed the 100% threshold for the first time since going public, rising 104% year-over-year to $1.28 billion. On the commercial side, domestic revenue surged 133% to $595 million. Government contracts contributed $687 million, up 84%. Net income nearly quadrupled to $870.5 million compared to $214 million in the same period a year ago. The company's Rule of 40 score, a key metric combining revenue growth and profitability, hit 145%, among the highest ever recorded for an enterprise software company of this scale. Management didn't just beat estimates; they raised full-year revenue guidance to $7.65–$7.66 billion, implying 71% growth for 2026 and clearing analyst consensus by nearly $400 million. The Valuation Debate—And Why It Keeps LosingPalantir critics are hyper-focused on the firm's short-term valuation. The company’s valuation is extreme. It prices in years of exceptional performance at today’s share price. And the critique goes: what happens if the company can’t deliver those results? However, these are the same arguments that have been made with PLTR at $20, $50, $100, and $180. They weren’t any less wrong then, and every time, investors who stayed on the sidelines missed the next leg higher. The critique isn't wrong; it's just not useful. In the case of PLTR, the only shots investors have missed are the ones they didn’t take. A longer-term view of Palantir shows a company that’s been growing its business at 75% to 100% annually. At that rate, the profits are bound to follow—a point Palantir CEO Dr. Alex Karp made in his letter to shareholders. Karp noted that Palantir made as much profit in the first quarter as it did in revenue just 12 months ago. The Palantir Critics Are Arguing Among ThemselvesThe critique of Palantir is the same today as it’s been for several years. But it doesn’t really matter to many retail investors. Here’s why. Consider investors who bought the stock below $20, or even below $10, rode it to above $180, and probably took out their initial investment along the way. These investors are now sitting on pure profit. They’re not losing sleep over valuation, and they aren’t going to apologize for having conviction in PLTR. That's why the valuation debate rings hollow. At this point, it’s well-meaning investors who are content with being “right” but missed out and continue to miss out on a one-of-one company. Analysts Are Raising Their TargetsIt’s always important to pay attention to what analysts do, perhaps more than what they say. PLTR’s consensus price target is $195.16, almost 50% above mid-March levels. It’s also more than double where it was one year ago. Here again, some critics will note that the consensus price hasn’t increased much over the last three months. But since the earnings report, Rosenblatt Securities raised its price target to $225 from $200; Citigroup also moved to $225 from $210. And, of course, Dan Ives of Wedbush reiterated his $230 price target for PLTR. Institutional buying is another part of the story. Two recent 13-F filings show that multiple Vanguard funds have started new positions in PLTR. The purchases total 195,923,062 shares, which comes out to roughly $27 billion as of May 8, the day of purchase. What the Dip in Palantir Actually RepresentsPLTR is going through a healthy and normal consolidation. Like gold above $5,000, Palantir stock trading above $200 was in rarefied air. Palantir’s inability to hold that big number isn’t a sign that the business model is flawed; it just showed that even the bulls need time to reset. And what’s happening with PLTR is a reset. But it’s one that current shareholders are likely to look back on the same way they’ve viewed every other dip. The company’s earnings results are obviously not enough to win over valuation skeptics. But being right about the valuation and being right about the stock are two very different things. |
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