Palantir’s Profit Machine Roars, But the Order Book Tells a Different Story
Published on 05/10/2026 at 23:52 | Redaktion boerse-global.de
The numbers coming out of Palantir’s first quarter read like a dream for any tech investor: revenue up 85% to $1.63 billion, net income of $871 million, and an operating margin of 53%. CEO Alex Karp called it the strongest quarter since the IPO. Yet the stock sits at €116.84 — down 18% year?to?date and roughly 35% below its 52?week high. The gap between operational brilliance and market sentiment has rarely been wider.
Much of the bearish pressure comes from a familiar name. Michael Burry, the “Big Short” investor who famously bet against the housing market, has gone public with a nearly $1 billion notional short position on Palantir. In a Substack post from April 2026, he revealed he holds put options with strike prices of $100 and $50, expiring in December 2026 and June 2027. “I am not selling these today,” Burry wrote. His fair?value estimate for the stock: roughly $46 per share, citing heavy stock?based compensation, a history of unprofitability, and a deal?by?deal sales model that lacks scalability.
Insider activity adds to the unease. Over the past 90 days, company executives have sold about $138 million worth of shares. Among them was co?founder Peter Thiel, who unloaded stock in March at prices between $140 and $147 — well above the current level. Such sales often weigh on investor confidence, especially when the valuation leaves little margin for error.
On the surface, the business itself appears bulletproof. US revenue now accounts for 79% of total sales, and the commercial segment within the US exploded 133% higher. The so?called “Rule of 40” score — a blend of revenue growth and profit margin — stands at a jaw?dropping 145%. Palantir carries zero debt and a $7.2 billion cash pile. The adjusted free cash flow hit $925 million.
Should investors sell immediately? Or is it worth buying Palantir?
But beneath the headline numbers, the growth engine is starting to show cracks. The value of new contracts signed in the quarter increased 61% — a sharp deceleration from the 138% clip in the prior period. The stock of committed US commercial contracts also lost momentum, with its growth rate sliding from 199% to 112% over three quarters. Wedbush analyst Dan Ives partly attributes the slowdown to an internal reclassification — a contract moved from commercial to government — but the trend nevertheless unsettled investors.
The valuation premium remains extreme. Palantir trades at a price?to?earnings ratio of about 155. Bulls argue that the strong cash flow generation justifies the multiple, and the company did raise its full?year revenue guidance to approximately $7.65 billion. CEO Karp has predicted the US business will double again by 2027 — a bold forecast that either validates the current price tag or sets the stage for a steep correction if momentum falters.
Analysts are deeply split. Rosenblatt lifted its price target to $225 and maintained a buy rating, while Argus upgraded the stock after the earnings release. On the other side, Jefferies has a $70 target, HSBC downgraded to hold, and DA Davidson cut its target from $180 to $165 with a neutral stance. The consensus from 31 analysts lands at a moderate buy with a $194 average target.
Palantir at a turning point? This analysis reveals what investors need to know now.
Technically, the picture offers little comfort. The relative strength index sits at 40.5, and the stock trades roughly 17% below its 200?day moving average — territory that typically signals no imminent recovery. With a P/E ratio north of 150, any further deceleration in contract growth could hit the share price hard.
Palantir’s annual general meeting is set for June 3, 2026. That’s when management will need to convince shareholders that the slowdown in deal?flow is a temporary blip, not the beginning of a trend. For now, the market is voting with its feet — and Michael Burry is adding to his bet that the stock has a long way to fall.
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Palantir Stock: New Analysis - 10 May
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