Palantir’s Steel Deal and Pentagon Backing Set the Stage for a Pivotal Earnings Report

Palantir reports Q1 earnings amid a stock dip, a new Cleveland-Cliffs AI deal, and surging US commercial revenue. Analysts eye $1.54B in sales.

The contrast between Palantir’s operational momentum and its stock market performance has rarely been starker. As the data analytics firm prepares to release first-quarter results on Monday, May 4, it does so with a fresh industrial client, renewed Wall Street optimism, and a persistent European headache that refuses to go away.

Shares of Palantir closed at €117.90 in recent trading, down roughly 18% since the start of the year and well below their 2024 highs. The stock has slipped beneath its 200-day moving average, a technical signal that has rattled some investors. Weak industry headlines—including reports of slowing revenue at OpenAI—have dragged down valuations across the artificial intelligence sector, Palantir included.

A Steel Giant Signs On

Just days before the earnings release, Palantir announced a three-year agreement with Cleveland-Cliffs, one of North America’s largest flat-rolled steel producers. The company will deploy Palantir’s AI platform to optimize production planning and order management across its industrial operations.

The deal marks a significant expansion of Palantir’s footprint in heavy industry, a sector where multi-year commitments are increasingly replacing short-term pilot projects. Boeing had already integrated the software into its defense and aerospace programs, signaling that Palantir’s technology is finding traction beyond its traditional government client base.

Wall Street’s Expectations Are High

Analysts are looking for a strong quarter. The consensus estimate calls for revenue of approximately $1.54 billion, a 74% surge from the same period last year. Adjusted earnings per share are expected to double to $0.28, while adjusted operating profit is forecast at roughly $870 million.

Oppenheimer analyst Param Singh initiated coverage with an “Outperform” rating and a $200 price target, citing the company’s high customer retention rates. “Once Palantir’s software is deeply embedded in a client’s operations, switching becomes extremely rare,” he noted. Wedbush’s Dan Ives remains even more bullish, maintaining a $230 target and describing demand for Palantir’s AI platform as “unprecedented” across both government and commercial clients.

Baird analyst William Power also rates the stock a buy, with a $200 target. He expects the company to post its eleventh consecutive quarter of accelerating revenue growth.

The US Commercial Engine Is the Key

For investors, the most critical metric remains Palantir’s US commercial business. In the previous quarter, that segment exploded 137% year-over-year. If that pace holds, analysts anticipate the company will raise its full-year guidance when it reports on Monday.

Beyond the numbers, new government contracts could provide additional tailwinds. Wedbush has flagged potential deals with the Federal Aviation Administration, which is in the process of modernizing its air traffic control systems. Meanwhile, Palantir’s AI system Maven has been formally designated as a Pentagon program, securing long-term funding and deployment within the US defense apparatus.

European Headwinds Persist

Across the Atlantic, the reception has been far cooler. Germany’s military, the Bundeswehr, has ruled out awarding contracts to Palantir for the foreseeable future. Thomas Daum, the official responsible for the Bundeswehr’s cyber defense, told Handelsblatt that granting industrial personnel access to national databases is currently “unimaginable.”

Defense Minister Boris Pistorius had earlier raised concerns about Palantir co-founder Peter Thiel’s involvement with Stark Defense, a German drone manufacturer. Instead of turning to Palantir, Germany is now testing software from three European providers, with a contract expected to be awarded before the end of the year.

The financial impact of losing the German business is minimal—Palantir’s international operations have historically played a secondary role to its US revenue. But the political setback adds a layer of uncertainty to the company’s European expansion narrative.

Insider Sales Add to the Caution

Over the past several months, Palantir insiders have sold more than $400 million worth of stock. While such sales are not unusual in high-growth tech companies, the scale has drawn attention from market watchers who question whether those closest to the business see the current valuation as stretched.

What Monday Could Bring

Palantir’s management has guided for first-quarter revenue of roughly $1.53 billion, slightly below the analyst consensus. The stock’s year-to-date decline means the bar for a positive reaction is relatively low—but so is the tolerance for disappointment.

If the US commercial business delivers another quarter of triple-digit growth, the shares could regain momentum. A miss on that front, however, would likely deepen the selloff. With the earnings report just days away, all eyes are on whether Palantir can translate its operational wins into a stock price that reflects them.