Palantir’s stock went on a wild ride after crushing Q1 earnings expectations with $883 million in revenue and raising growth guidance to 36%. Despite dominating the S&P 500 with a 340% return in 2024, investors got spooked by the company’s sky-high valuation at 600 times earnings. The stock plunged 9% after hours, eventually dropping more than 20%. Even AI platform success couldn’t calm Wall Street’s jitters – but there’s more to this rollercoaster story.
Palantir’s wild ride in 2025 is giving investors whiplash.
After dominating the S&P 500 with a mind-blowing 340% return in 2024, the data analytics powerhouse kept its crown as the index’s top performer, surging another 57% by early May.
Palantir’s meteoric rise continues to stun Wall Street, with the AI darling adding another 57% gain after crushing 2024’s record performance.
The stock climbed to a dizzying $120 before its Q1 earnings report.
Then came the plot twist.
Despite crushing earnings expectations and raising full-year guidance from 30% to 36% growth, Palantir’s stock took a nosedive.
We’re talking a 9% plunge after hours, eventually bleeding out to more than 20%.
Talk about a tough crowd.
The company delivered exactly what it promised – and then some – with its artificial intelligence platform (AIP) exceeding even management’s rosy expectations.
But apparently, that wasn’t enough for Wall Street’s demanding audience.
Here’s the rub: Palantir’s valuation is, well, astronomical.
Trading at over 600 times earnings (yes, you read that right), even the most optimistic investors are starting to question if they’re paying caviar prices for future tuna fish earnings.
The Diluted EPS calculations, which include potential shares from options, paint an even more concerning picture for value-focused investors.
The company reported revenue of $883 million, showing impressive growth that still wasn’t enough to satisfy market expectations.
The U.S. commercial segment showed particularly strong momentum with 68% growth projected for the year ahead.
The market’s acting like that friend who always finds something wrong with a perfect date.
The technical picture isn’t exactly comforting either.
With support levels at $97, $83, and $66, there’s plenty of room for the stock to fall before finding its footing.
The median Wall Street target of $96 suggests a 20% haircut from recent highs.
But not everyone’s bearish – Dan Ives at Wedbush is predicting a trillion-dollar market cap within three years, a bold claim considering the current $250 billion valuation.
Palantir’s core strengths remain intact.
Their Gotham and Foundry platforms, enhanced by AIP, are winning praise from industry experts.
Forrester Research even rated their AI capabilities above tech giants Google and Microsoft.
But in today’s market, good just isn’t good enough.
Sometimes you have to be spectacular just to avoid getting crushed.
