Inside Palantir’s Contradiction: Record Revenue, a Stalled Stock, and an Ethics Fight Ahead

Despite 85% revenue jump to $1.63B and 154% EPS growth, Palantir faces stock decline amid European pushback, governance scrutiny, and wide analyst rating dispersion.

Palantir has just delivered a quarter that would make most software companies blush – revenue up 85% to $1.63 billion, adjusted earnings per share soaring 154% to $0.33, and a Rule-of-40 score of 145% that signals extraordinary efficiency. Yet the stock sits at €114.48 in Frankfurt, down 20% since January and a full 36% below its 52-week high. The disconnect isn’t just about valuation. It’s about a gathering governance storm that investors can no longer ignore.

The numbers themselves are hard to argue with. The company’s remaining performance obligations stood at $4.5 billion, and it held $8.0 billion in cash and short-term Treasuries at the end of the quarter. Management guided for second-quarter revenue of roughly $1.8 billion, well ahead of the consensus estimate of $1.68 billion. For the full year 2026, Palantir is targeting around $7.65 billion in sales – a 71% jump from the prior year.

That growth trajectory has pulled analyst ratings in opposite directions. Rosenblatt’s John McPeake lifted his price target from $200 to $225 after the quarter, maintaining a “Buy” rating. Wedbush sits even higher at $230. At the other end of the spectrum, RBC Capital holds at $90, while DA Davidson cut its target from $180 to $165. The wide dispersion reflects a central tension: Palantir trades at roughly 97 times expected earnings, a multiple that leaves it exposed to any whiff of deceleration or political headwind.

Those headwinds are building fast in Europe. In Germany, Digital Minister Karsten Wildberger has openly called for developing a European alternative to Palantir, and the Bundeswehr’s cyber chief, Thomas Daum, warned against giving industrial personnel access to national military databases. Across the Channel, a large NHS region is sticking to its refusal to join the Federated Data Platform, and the UK government is reported to be reviewing an exit clause in the £330 million contract. A separate US arbitration order from May 12, concerning former engineers and alleged misuse of confidential information, adds another legal wrinkle.

On the geopolitical side, Palantir continues to deepen its wartime credentials. CEO Alex Karp met Ukrainian President Volodymyr Zelenskyy in Kyiv on May 12 to discuss AI partnerships. The collaboration includes the Brave1 Dataroom initiative, which equips Ukrainian interceptor drones with artificial intelligence. According to the company, these systems had destroyed 33,000 Russian drones by March 2026. That operational proof point helps open doors to defense budgets worldwide, but it also attracts the kind of scrutiny that is now spilling into the boardroom.

The June 3 annual general meeting will put governance front and center. Two shareholder proposals are on the ballot: one calling for more disclosure on human rights due diligence in the defense business, and another for an independent human rights impact assessment. The board has recommended voting against both, arguing that Palantir is not a surveillance company and that legal confidentiality constraints limit what it can reveal. Activist groups are pressing hard. Investor Advocates for Social Justice is backing a proposal filed by the Congregation of the Sisters of Saint Joseph of Peace. Separately, the New York Comptroller had already requested an independent review of human rights risks tied to Palantir’s work with the Department of Homeland Security and ICE.

Institutional investors are taking note. The Dutch pension fund ABP has already exited its position, and public pension funds in several US states face pressure from beneficiaries to follow suit. The combination of ethical concerns and valuation sensitivity has made the stock a battleground.

Technically, the shares are struggling to find a floor. The price sits below both the 50-day moving average of €124.15 and the 200-day average of €139.63. The Relative Strength Index at 54.3 suggests no oversold bounce is imminent. The immediate catalyst will be the May 19 investor meeting in New York, hosted by Rosenblatt, where management will have a chance to talk directly to institutional buyers. But the real test comes on August 3, when Palantir reports second-quarter results and must show that its record order book can translate into sustained momentum – and that the governance debate has not begun to chill demand from its core government and defense clients.