Palantir’s $32.5 Billion FAA Gamble and a Steel Giant’s Bet: The Earnings Story

Palantir reports Q1 earnings on May 4 with a new Cleveland-Cliffs deal, 74% revenue growth expected, and a shot at a $12.5B FAA air traffic modernization contract.

Palantir is heading into its first-quarter earnings report with a fresh industrial heavyweight in its corner and a shot at one of the largest civilian AI contracts in US history. The Denver-based data analytics firm signed a three-year deal with steelmaker Cleveland-Cliffs on April 28, embedding its enterprise AI platform into production planning, order management, and operational workflows. CEO Lourenco Goncalves put it bluntly: the technology “allows us to solve problems that humans simply cannot solve.” The agreement followed a pilot program and marks another step in Palantir’s push beyond government and defense into heavy industry.

The timing is critical. Palantir reports Q1 results after the US market closes on May 4, and the numbers are under intense scrutiny. Wall Street expects earnings per share of $0.28 — a 115 percent jump year-over-year — on revenue of $1.54 billion, which would represent 74 percent growth. The company’s own guidance is tighter, forecasting revenue between $1.532 billion and $1.536 billion, with adjusted operating income in the range of $870 million to $874 million. For the full year, management has set a target of roughly $7.2 billion in revenue, a 61 percent increase, supported in part by an Army contract worth up to $10 billion.

Palantir’s commercial US business has been the standout performer. In the fourth quarter of 2025, that segment surged 137 percent to $507 million, while international commercial revenue grew just 2 percent for the full year. The imbalance reflects a deliberate strategic tilt: the company has positioned itself as an explicit tool of American power, a stance that has fueled domestic growth but created friction abroad. Three years ago, US and international revenue were roughly balanced; today the split is 76-to-24 in favor of the home market.

In Brazil, Palantir’s involvement in a national school bus program has drawn sharp criticism over digital sovereignty concerns. Europe remains a tough sell, with the notable exception of the UK, where a £330 million data platform contract with the National Health Service provides a solid anchor. The company’s manifesto-style declaration of loyalty to the US defense apparatus has reinforced its brand at home while complicating expansion overseas.

Yet the domestic pipeline is brimming with opportunity. Palantir is competing alongside Thales and Airspace Intelligence for the FAA’s SMART program, which aims to modernize the US air traffic control system. The goal is to extend collision prediction from the current 15-minute window to as long as two hours. Congress has allocated $12.5 billion for the broader airspace overhaul, and the FAA has estimated the total need at $32.5 billion. Palantir has already secured a smaller data analytics contract with the agency.

Operationally, the company is firing on all cylinders. Its operating margin hit 57 percent in the most recent quarter, and the Rule of 40 score — a measure combining revenue growth and profitability — stood at 127 percent. The total contract value in the last quarter reached a record $4.2 billion. Adjusted free cash flow for the full year is expected to come in at around $4 billion.

The stock, however, tells a different story. Shares trade at roughly €120.34, about 33 percent below the 52-week high of €179.86, and have fallen nearly 16 percent since the start of the year. The slide reflects a broad revaluation of high-multiple software names rather than a deterioration in Palantir’s fundamentals. The stock is trading well below its 200-day moving average.

Of the 21 analysts covering the stock, 14 rate it a buy, five a hold, and two a sell. The average price target stands at $186.47. William Blair analyst Louie DiPalma highlighted a Pentagon budget request of $2.3 billion for Palantir’s Maven Smart System, which he said provides multi-year revenue visibility. The company has beaten consensus earnings estimates for ten consecutive quarters.

The May 4 report will test whether the growth trajectory can support the valuation — or whether the recent pullback is the beginning of a deeper correction. For now, Palantir is betting that steel mills and air traffic control towers can carry the narrative as well as battlefields and intelligence agencies.