PALANTIR STOCK TUMBLES DESPITE RECORD RESULTS
Palantir Technologies reported another monster quarter, with revenue jumping 63% year-on-year to US$1.181 billion, smashing expectations of US$1.09 billion. Adjusted EPS came in at US$0.21 (+110% y/y), while GAAP profit surged 231% to US$476 million. Free cash flow rose 46% to US$540 million, the company now sitting on US$6.4 billion in cash and zero debt. U.S. commercial sales rocketed 121%, and management raised full-year guidance again: Q4 revenue of US$1.33 billion (vs US$1.19 billion expected) and full-year revenue of US$4.396–4.400 billion — about 53% growth. Despite that, PLTR shares slid 7.2% on the day, closing around US$192 after an all-day decline. Even with that pullback, the stock is still up roughly 156% year-to-date, valuing the company around US$450 billion. For Australian investors watching from afar, it’s a reminder that in high-flying AI names, sentiment can turn faster than a Sydney southerly.
Why did the market dump a great report?
Markets don’t always behave rationally. Palantir smashed estimates across the board — but when expectations are sky-high, even stellar numbers can disappoint. The stock had surged 150 %+ for the year leading into the report and was trading at roughly 229× forward free cash flow and over 200× forward earnings. That’s nose-bleed territory. When you’re priced for perfection, anything less triggers “sell the news” reactions, algo selling and profit-taking.
Valuations were already extreme
Before the results, Palantir’s valuation multiple left no room for even the slightest wobble. Aussie investors will recognise the pattern — it’s similar to what happens when hot lithium or tech names run well ahead of fundamentals on the ASX. The bar gets impossibly high, and good news becomes an excuse to take profits.
AI stocks sold off globally
The Nasdaq fell around 2% on the same day, as traders rotated out of big-multiple AI plays amid fresh talk of an “AI bubble.” With Palantir viewed as one of the purest AI exposure stocks, it was caught in the downdraft. Global tech sentiment spilled over into after-hours and Asia-Pacific trading as well.
The Michael Burry effect
Another catalyst: headlines about Michael Burry (of The Big Short fame) holding nearly US$912 million worth of Palantir puts and US$187 million in Nvidia puts — 80% of his book according to his 13F filing. The data was six weeks old and likely hedged or closed, but the “Big Short 2.0” headlines spooked retail traders and fed the fear trade.
Valuation > 200× forward earnings
AI sector correction hit the Nasdaq – 2 %
Michael Burry short chatter triggered panic
Algorithmic selling exaggerated the drop
Profit-taking after a massive YTD run
So the fall wasn’t about weak business performance — it was about expectations and psychology. In markets this hot, good often isn’t good enough.
Record results and stronger outlook
While traders focused on the pullback, the fundamentals told a very different story. Palantir delivered a blockbuster quarter that reinforced its leadership in AI-driven enterprise software. It continues to combine growth and profitability in a way few tech firms can match.
U.S. commercial momentum exploding
The 121% year-on-year surge in U.S. commercial revenue signals that Palantir’s Artificial Intelligence Platform (AIP) is catching on rapidly in the private sector — not just government contracts. Industries like healthcare, mining logistics, energy, and defence are rolling out AIP for real-time data analytics and decision support — much like Aussie companies adopting AI to streamline operations.
Balance sheet bulletproof
Sitting on US$6.4 billion in cash and zero debt, Palantir has the flexibility to invest, acquire or weather any economic storm. That kind of balance sheet strength would make even ASX blue-chips blush.
Raised guidance again
Management lifted guidance for the fourth straight quarter. Q4 revenue is now pegged at US$1.33 billion, up from analyst expectations of US$1.19 billion. Full-year revenue guidance rose to US$4.396–4.400 billion (+53% y/y), while free cash flow for 2025 is projected between US$1.9 billion and US$2.1 billion — figures that underscore accelerating momentum.
Revenue: +63 %
Adjusted EPS: +110 %
GAAP profit: +231 %
Free cash flow: +46 %
Cash: US$6.4 B
Debt: 0
For a tech firm to grow this fast and generate this much cash is rare. The numbers back up Palantir’s claim that it’s not just another AI story — it’s a cash-printing one.
A buying opportunity for long-term investors?
For traders, the drop hurt. For long-term investors, it may be a gift. Palantir’s fundamentals remain rock-solid, and its position at the heart of global AI adoption looks stronger than ever. Many analysts still see dips below US$190 as strategic entry points.
The AIP platform keeps compounding
Palantir’s AIP has become a cornerstone for enterprises embedding AI into daily workflows. As more clients onboard, the network effect deepens — sticky revenues, higher margins, and a durable moat. It’s the kind of compounding engine that appeals to Buffett-style long-term investors, including Australians building AI exposure in their portfolios.
Technical support and sentiment
Technically, the stock has bounced several times near the US$185–190 support range. Its recent high of US$207 on 31 October shows that buyers remain active. The correction may be a natural reset rather than the end of a rally.
Year-to-date still up +156 %
AI adoption entering the “second innings”
Strong cash position, no leverage
Global AI tailwinds intact
Technical support around US$190
If you believe AI’s impact is just getting started, Palantir could be one to watch. Aussie investors looking for U.S. exposure to the next wave of AI-driven enterprise growth might view this pullback as an opportunity, not a warning.
