Palantir’s Next Frontier: From Steel Mills to Air Traffic Control as Earnings Loom

Palantir secures Cleveland-Cliffs AI deal and vies for FAA contract, but a 111x P/E ratio leaves no room for error ahead of Q1 results on May 4.

The data analytics firm that cut its teeth on military intelligence is now making inroads into America’s heavy industry and civilian airspace, but a punishing valuation means the company can ill afford a misstep when it reports first-quarter results next week.

Palantir’s commercial push took a significant stride forward on April 28, when US steel giant Cleveland-Cliffs signed a three-year contract to embed the company’s enterprise AI platform across its production planning, order management and operational workflows. The deal, which followed a pilot program, marks one of the most prominent adoptions of artificial intelligence in the traditional manufacturing sector. Cleveland-Cliffs CEO Lourenco Goncalves put it bluntly: the technology “allows us to solve problems that humans simply cannot solve.”

That industrial win comes alongside a far bigger prize in the skies. The Federal Aviation Administration is overhauling its air traffic management system under a project dubbed SMART, designed to extend conflict detection from the current 15-minute window to as much as two hours in advance. Palantir is competing against Thales and Airspace Intelligence for the contract, part of a broader FAA modernization effort carrying a total budget of $32.5 billion. The company already has a foothold: the FAA uses Palantir’s Foundry software, and in early April the agency determined that only Palantir could deliver the necessary data modernization without delays. A six-month integration phase award is expected on May 1. Congress has allocated $12.5 billion specifically for the air traffic control overhaul, while the FAA pegs the full program cost at $32.5 billion.

The civilian government push extends beyond aviation. Palantir recently secured a $300 million framework agreement with the US Department of Agriculture, building on earlier work helping the agency administer a multibillion-dollar farmer relief program. Rosenblatt analyst John McPeake sees the momentum continuing, projecting a 58% jump in government revenue this year.

Yet for all the contract activity, Palantir’s stock has been under severe pressure. The shares trade around 33% below their 52-week high of $179.86, and have fallen roughly 16% since the start of 2026. At current levels near $120, investors are paying 111 times expected earnings and 77 times sales — multiples that leave no room for disappointment. The broader selloff in high-multiple software names, including Adobe and Salesforce, has dragged Palantir lower regardless of its operational performance.

The company’s fundamentals tell a different story. Last quarter, Palantir recorded a record total contract value of over $4.2 billion. Its Rule-of-40 score — a measure balancing growth and profitability — stands at 127%, signaling robust execution. Ten consecutive quarters have seen the company beat consensus earnings-per-share estimates. For the first quarter, due after the close on May 4, Wall Street expects EPS of $0.28, a 115% year-over-year increase, on revenue of $1.54 billion, representing 74% growth. Palantir’s own guidance is tighter, calling for revenue between $1.532 billion and $1.536 billion, with adjusted operating income of $870 million to $874 million. For the full year, management targets roughly $7.2 billion in revenue, a 61% advance, underpinned in part by an Army contract worth up to $10 billion.

Analyst sentiment remains broadly positive. Of 21 Wall Street analysts covering the stock, 14 rate it a buy, five a hold and two a sell, with an average price target of $186.47. William Blair’s Louie DiPalma highlighted a Pentagon budget request of $2.3 billion for Palantir’s Maven Smart System, providing multiyear revenue visibility.

Morgan Stanley expects Palantir to beat its own forecasts and raise its full-year outlook. But with the market already pricing in exceptional results, the company may need a clear upside surprise to reverse the stock’s slide. The May 4 report will test whether the growth trajectory can justify the valuation — or whether the correction has further to run.