Palantir’s Rally: Dell’s Blockbuster Numbers Confirm the Infrastructure Thesis, Yet the Stock’s Price Tag Divides Wall Street

The catalyst was unmistakable. When Dell Technologies reported a 757% surge in AI server revenue to $16.13 billion for its fiscal first quarter, the Palantir share price shot up more than 9% on Friday, capping a weekly gain of nearly 14% at €134.18. The message from the hardware giant was clear: corporate customers are building out the physical infrastructure that Palantir’s software sits on top of. With Palantir’s Foundry and AIP platform now embedded in Dell’s offerings since mid-May, each strong Dell print serves as a leading indicator for the software adoption that follows.

That dynamic is playing out against a backdrop of accelerating industrywide spending. Gartner projects global AI software expenditure will climb 60% to $453 billion by the end of 2026. Palantir’s own numbers already reflect that momentum. First-quarter revenue jumped 85% to $1.63 billion, with the so-called Rule of 40 — the sum of revenue growth and operating margin — hitting a record 145%. US commercial revenue alone surged 133% to $595 million, and the total number of US commercial customers rose 31% to 1,007.

The company’s own guidance for fiscal 2026 calls for revenue between $7.65 billion and $7.66 billion, backed by 206 contracts worth over $1 million and 47 deals exceeding $10 million. Those figures have emboldened sell-side analysts. Rosenblatt Securities reiterated its buy rating and $225 price target after meeting with CFO David Glazer, arguing Palantir could reach a market capitalization above $1 trillion within five years. Citi followed suit, also lifting its target to $225. The average analyst price target among the 19 "Strong Buy" ratings out of 28 analysts sits at $186.89, according to the primary source.

Should investors sell immediately? Or is it worth buying Palantir?

Yet the stock’s valuation remains a flashpoint. The trailing price-to-earnings ratio hovers around 203, and even the forward multiple — though down roughly 65% from its 12-month average as earnings catch up — is still elevated. The relative strength index of nearly 90 signals severely overbought conditions. From its 52-week high of €179.86, the stock is still some 25% below that mark.

Adding to the tension, insider selling has been pronounced. Co-founder Peter Thiel unloaded 2 million shares worth about $290 million over the past six months, while CEO Alex Karp sold roughly 891,000 shares. Institutional investors, however, appear unfazed: hedge funds opened 1,657 new positions against 1,422 closures, a net vote of confidence.

Beyond the Dell tailwind, Palantir benefits from a deepening relationship with Nvidia, which Dell confirmed as part of its infrastructure stack. The US government’s exploration of initiatives to strengthen the domestic drone industry also plays to Palantir’s traditional strengths in defence and intelligence. The stock now trades roughly 10% above its 50-day moving average, and while the debate over its multiple rages on, the operational metrics — the 85% revenue growth, the record Rule of 40, the accelerating US commercial business — provide the raw material for bulls to argue that the premium is earned.

The next crucial data point will come when Broadcom reports on June 3. As a bellwether for AI hardware demand, that report will either reinforce the infrastructure thesis that has lifted Palantir or inject a note of caution. For now, the software layer is riding high on the hardware wave, and the market is betting the wave has further to run.

Ad

Palantir Stock: New Analysis - 31 May

Fresh Palantir information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.

Read our updated Palantir analysis...

en | US69608A1088 | PALANTIR’S | boerse | 69452795 |