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Palantir Beats on Q3 and Raises Outlook as AI Momentum Builds, Shares Fall on Lofty Valuation

A valuation above 200 times forward earnings overshadowed the upgraded outlook.

Overview

  • Q3 revenue came in at $1.18 billion with adjusted EPS of $0.21, topping estimates as sales jumped 63% year over year.
  • The company guided Q4 revenue to $1.327–$1.331 billion and lifted full‑year 2025 sales to about $4.396–$4.40 billion, with Q4 adjusted operating income seen at $695–$699 million.
  • U.S. government revenue rose 52% to $486 million and U.S. commercial revenue surged 121% to $397 million, aided by adoption of its AI platform and partnerships with Nvidia, Snowflake, and Lumen.
  • Shares fell roughly 6%–7% in premarket and after‑hours trading as the stock’s forward P/E near 230–246 raised concern following a year‑to‑date gain of more than 170%.
  • Analyst caution and bearish positioning added pressure, including Jefferies’ underperform rating and large put bets disclosed by Michael Burry, with some noting shutdown risk and reputational scrutiny around government contracts.