Palantir Gains 8% as Snowflake’s AI Adoption Data Dispels ‘Ghost Trade’ Fears

Snowflake's strong quarterly report and US drone funding hopes drove Palantir shares higher, but a lofty P/E of 161 and insider selling temper the rally.

Palantir shares shot up 8.2% on Thursday to €123.06, propelled by a potent one-two punch: a blockbuster quarterly report from Snowflake that validated the enterprise AI pivot, and fresh speculation about US government funding for domestic drone makers. The stock’s daily volume exploded past 52 million shares as investors piled in, betting that the data-analytics giant is finally shedding the discount that had been priced in for so-called “AI ghost trade” stocks.

The catalyst from Snowflake was decisive. The cloud data platform reported a surge in AI accounts from 9,100 to 13,600 over a single quarter and called the inflection point “clear.” CEO Frank Slootman also lifted the full-year forecast, citing a six-billion-dollar, five-year pact with Amazon Web Services. For Palantir, the implications cut to the core of a long-running debate: are corporate AI budgets stuck at the infrastructure layer, or flowing into software? Snowflake’s numbers supplied a loud answer. The pair occupy adjacent rungs of the enterprise AI stack — Snowflake structures data, Palantir’s AIP builds the ontology and decision layer on top — so a vote of confidence from one directly bolsters the thesis for the other. ServiceNow and Oracle both climbed more than 6% on the day; Microsoft, Palo Alto Networks and Atlassian added at least 3%.

The defence tailwind came without a direct contract. A Wall Street Journal report identified Unusual Machines, Performance Drone Works and Neros Technologies as potential recipients of US government funding for domestic drone production. Palantir was not named, but the market read across the entire defence-AI ecosystem, particularly because of a strategic partnership the company struck in March with Ondas and World View. That alliance covers AI-powered reconnaissance across stratospheric, airborne and ground systems — precisely the multi-domain architecture that would underpin autonomous drone operations. Investors connected the dots quickly, even though no new deal was announced.

Fundamentals reinforce the case, albeit at a steep price. First-quarter revenue hit $1.633 billion, an 85% surge that marks the fastest growth in Palantir’s history. US commercial revenue more than doubled to $595 million, up 133%. The company swung to a net income of $870.5 million, or $0.34 per share, while operating cash flow reached $899.2 million. Adjusted free cash flow stood at $925 million, representing a 57% margin. Management raised the full-year revenue forecast to roughly $7.65 billion, implying 71% growth, and the remaining deal value in the US business soared 112% to $4.92 billion.

Yet the valuation remains the central tension. At the current market capitalisation of roughly $368 billion, the trailing price-to-earnings ratio sits near 161, while the forward P/E is about 98 — both far above any software peer. The price-to-sales multiple of 44 tells a similar story. Insider selling has added to the caution: executives disposed of $422 million worth of stock over the past three months. The relative strength index hit 89.9, deep in overbought territory, and annualised volatility is running at 48%.

Friday brought further gains, with the stock edging up 2.4% to €126. Still, that remains nearly 30% below the 52-week high of €179.86 and about 20% above the low of €104.86. The Snowflake numbers have given the market a concrete reason to reassess the AI software narrative, and the defence chatter provides an emotional overlay. Whether momentum alone can silence the valuation debate is another question entirely.