PALO ALTO, Calif. – Palantir Technologies is preparing to unveil its quarterly earnings after the market closes on Monday, drawing significant attention from investors anticipating substantial fluctuations in the company’s stock price. Opting into the options market indicates that traders predict a move of over 12% in the wake of the announcement.
If shares rise by this margin, Palantir could reach a record high of approximately $139. Conversely, a similar decline could see the stock plummet to about $108, creating a volatile landscape for those with stakes in the technology and defense contractor.
Last year, Palantir emerged as the standout performer on the S&P 500, posting an impressive 340% gain. As of this past Friday, the company has maintained its leadership within the index for 2023, with its shares climbing more than 60% since the start of the year—even as the broader S&P 500 dipped slightly over 3%.
The company has recently enjoyed significant momentum, fueled by an escalating demand for artificial intelligence services and shifting priorities in federal spending. In the fourth quarter of last year, more than 40% of Palantir’s revenue came from contracts with the U.S. government. This reliance could be a double-edged sword, as ongoing cost-cutting measures in Washington have raised concerns. Nevertheless, the company’s strong position in the AI sector combined with a government push for increased defense spending could serve as favorable winds for its stock.
Palantir’s stock surged over 20% following its last two earnings reports, both of which highlighted robust demand for its AI platforms. In those reports, the company recorded quarterly revenue growth of over 30%. Analysts currently anticipate a further increase of 36% in revenue for the first quarter, along with a more than 60% rise in adjusted earnings.
Despite this positive outlook, market analysts are cautious. Due to Palantir’s rapid stock appreciation over the past 18 months, only one analyst currently advises purchasing shares at this price level. This hesitance reflects a broader trend of caution following the considerable gains that Palantir has experienced.
The enthusiasm surrounding Palantir is not confined to institutional investors; it has garnered a passionate following among retail investors as well. Recent reports from Vanda Research identified Palantir as the third most favored stock among individual investors, trailing only tech giants Nvidia and Tesla. Additionally, a recent survey indicated that many retail investors enthusiastically bought into the stock during a price dip last month, showcasing confidence in its long-term trajectory.
As the earnings report approaches, all eyes will be on whether Palantir can continue its impressive growth and how its performance will impact market sentiment moving forward. Investors will be closely monitoring not just the numbers, but the narrative surrounding the company as it navigates a rapidly changing economic and political landscape.