Palantir Just Delivered an 85% Revenue Surge. Why the Stock Is Still Flailing.

Despite record Q1 revenue of $1.63B and raised guidance, Palantir shares trade 19% lower YTD as extreme multiples (62x sales) spark analyst caution and insider selling.

The data-analytics group just posted the kind of quarter most software companies can only dream of, yet its shares are trading roughly 20% below where they started the year. That disconnect between operational firepower and market reception is the defining tension for Palantir right now.

For the first quarter of 2026, revenue hit $1.63 billion — an 85% jump from a year earlier. Adjusted earnings per share came in at $0.33, a nickel ahead of analyst estimates. The company raised its full-year revenue forecast to $7.656 billion, implying an accelerated growth rate of 71%. On paper, these are the sort of numbers that usually send a stock screaming higher.

The government segment was a particular standout. Revenue from the Pentagon and other agencies climbed 84% to $687 million, and the U.S. commercial business surged 133% to $595 million. Crucially, the Department of Defense has designated Palantir's "Maven Smart System" as a Program of Record — a formal acquisition program that locks in long-term, recurring revenue streams from the military. That institutional seal of approval gives the top line unusual visibility for a company trading at extreme multiples.

Beyond the core, Palantir is pushing into adjacent markets. Since March it has partnered with Ondas Holdings to embed AI-powered surveillance and reconnaissance capabilities into drone systems. Ondas itself posted first-quarter revenue of $50.1 million, more than ten times the prior-year period, driven largely by demand for those drone solutions. Separately, Palantir is working with Surf Air Mobility to run electrically powered aircraft through the SurfOS operating system. Both deals underscore a systematic expansion into defense and aerospace.

Yet the stock sits at roughly €115 — well below its 200-day moving average of €139.63 and down about 19% year to date. The culprit is valuation. Palantir trades at 62 times sales and more than 150 times trailing earnings. That kind of multiple demands near-flawless execution indefinitely, and not everyone is convinced.

Jefferies, for one, maintains an Underweight rating with a $70 price target, arguing the valuation requires "heroic assumptions about permanence." Short positions from prominent investors add to the headwinds. Meanwhile, retail investors have been pulling back, and insider sales have been piling on additional pressure.

Institutional money, however, tells a different story. AustralianSuper boosted its stake by more than 90% in the latest period, and overall institutional ownership sits at roughly 45.65%. The analyst consensus rates the shares a moderate buy with an average price target near $195 — implying significant upside from current levels if the growth story holds.

The next big catalyst comes in August, when Palantir reports second-quarter results. If the U.S. commercial segment sustains its momentum and the government pipeline continues to expand, that could start to justify the staggering multiples. Until then, investors are left with a stock that boasts annualized volatility above 54% and a chasm between what the business delivers and what the market is willing to pay.