Palantir Earnings: 1 Bullish Signal and 1 Area of Concern

Palantir Technologies Inc. (NASDAQ: PLTR) will report earnings after the market closes on May 5. This will be one of the most closely watched earnings reports for bulls and bears alike. And each group of investors will be looking for reasons to support their case.

If you’re bullish on Palantir, you’ll be looking for the company to continue its pattern of beating expectations on revenue and earnings while also continuing to provide aggressive guidance. Palantir has seemed to announce new deals weekly, if not several times a week, in the last quarter.

And those contracts have been with both government and commercial customers. The company’s revenue split between its government and commercial units continues to move closer to the 50/50 point.

However, if you’re bearish on PLTR stock, you expect the company to fall short of massive expectations. Plus, like many software companies, Palantir appears to be tariff-proof, but investors sold on the whiff of news that government spending would get cut. And for a stock priced for perfection and then some, it wouldn’t take much for the stock to fall 20% or more from its current level.

There are reasons to believe that both sides could be right. Here are two things that investors should focus on prior to the earnings report.

Palantir Bears Are a Broken Record, But May Have a Point

Critics of Palantir say the company’s stock is overvalued. And by any objective measure, that’s correct. Even among technology stocks that investors will commonly pay a premium to buy, PLTR stock is expensive.

 In fact, using a discounted cash flow model, the fair price of PLTR stock could be around $48 per share. That's a massive discount from the stock price on May 1, which is nearing an all-time high.

If the company doesn’t continue to blow away expectations on the earnings call, it’s not only possible, but likely, that the stock could take a hit. The stock dropped over 20% earlier in 2025 on rumors that the Department of Governmental Efficiency’s (DOGE) efforts to cut wasteful government spending would mean canceled contracts for Palantir.

But comments by Defense Secretary Pete Hegseth, along with the company’s recent deal to supply the North Atlantic Treaty Organization (NATO) with its AI-powered Maven Smart System, are putting those concerns to rest.

However, that’s the nature of a stock like Palantir. Investors have already seen the stock drop by more than 20% this year, highlighting the fact that the company is subject to macroeconomic events that are outside of its control.

History may repeat itself, or it may not. Either way, for investors who are not in PLTR stock, this may be a poor entry point.

Another Analyst Raised Their Price Target for PLTR Stock

On the other hand, just because PLTR stock is expensive doesn’t mean it can’t go higher. Since the drop earlier this year, Palantir has nearly made a round trip and has pushed past its 50-day simple moving average (SMA).

As a counterpoint to concerns about valuation, investors often look at what analysts are saying about a stock. In the case of Palantir, sentiment continues to be bullish. In fact, a key reason that PLTR stock has continued to climb in the past year is that analysts have been raising their price targets.

Many investors know that Dan Ives of Wedbush has been one of the leading Palantir bulls with a price target of $125. Ives was joined this week by Chris Versace from TheStreet Pro. Versace raised his target to $105, citing expectations for more defense spending.

Remember, retail investors have been buying Palantir stock since it went public via a direct listing in 2020. The growth in the stock over the last 12 months, and the last six months in particular, is being driven by institutional investors. These are the investors that have the bandwidth to move stocks in the way Palantir has been moving.

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The article "Palantir Earnings: 1 Bullish Signal and 1 Area of Concern" first appeared on MarketBeat.