Palantir’s AI Engine Roars On, but the Stock Remains Stuck in the Mud

Palantir secures Cleveland-Cliffs contract ahead of Q1 earnings; stock down 34% from highs as investors await US commercial growth and FAA catalyst.

The disconnect between Palantir’s operational momentum and its share price is widening by the day. While the data analytics firm secures blue-chip industrial clients and Wall Street analysts double down on bullish calls, the stock languishes well below its highs, caught in a broader sector downdraft. All eyes now turn to the company’s quarterly earnings release on May 4, which could either validate the skeptics or reignite the bulls.

A Steel Giant Joins the Fold

Just days before the report, Palantir announced a significant win in the heavy industrial space. Cleveland-Cliffs, one of North America’s largest flat-rolled steel producers, has signed a three-year agreement to deploy Palantir’s Artificial Intelligence Platform for production planning and order management. The deal marks a deepening of Palantir’s foothold in the US manufacturing sector, following Boeing’s earlier adoption of the software for its defense and aerospace programs.

The shift toward multi-year contracts, rather than short pilot programs, signals growing confidence among enterprise customers. Wedbush analyst Dan Ives, who maintains a $230 price target on the stock, described the demand environment as “unprecedented” across both government and commercial clients. Baird’s William Power is similarly upbeat, reiterating a $200 target and forecasting an eleventh consecutive quarter of accelerating revenue growth.

The Numbers on the Table

For the first quarter, consensus estimates call for revenue of $1.54 billion, representing a 74% year-over-year surge. Adjusted earnings per share are expected to double to $0.28. The critical metric for investors remains the US commercial segment, which rocketed 137% higher in the prior quarter. Should that pace hold, analysts anticipate a full-year guidance upgrade from the current $7.2 billion revenue forecast.

A potential catalyst looms on the horizon: the Federal Aviation Administration. The agency is modernizing its air traffic control systems with billions in funding available, and Palantir is vying to embed its AI directly into flight safety operations. A contract award would mark a major government win.

European Headwinds and Sector Sourness

Not all news is rosy. Germany’s defense ministry has signaled it will not award contracts to Palantir for now, a reminder that the company’s international business remains a secondary growth driver. While the European segment has historically lagged, investors are paying closer attention given the stock’s fragility.

That fragility is evident in the price action. The shares currently trade at around €118, down roughly 17% year-to-date and a staggering 34% below the 52-week high of nearly €180. Disappointing performance from OpenAI has soured sentiment across the entire AI ecosystem, with investors questioning lofty valuations and fearing intensifying competition.

The Earnings Verdict

Palantir’s management will lay its cards on the table after the close on May 4. A strong beat on US commercial revenue could halt the stock’s slide and potentially trigger a rally. But if that key segment fails to meet elevated expectations, the downside risk is considerable. For now, the company’s operational story remains compelling — the market just isn’t buying it yet.