AI in action · Markets
Palantir Grew 96%, and the Stock Still Slipped
Palantir's third-quarter revenue rose 96% to $2.31 billion and it raised its 2026 forecast to about $8.53 billion, yet the shares fell about 3% after hours. At this valuation a beat is the minimum.
Palantir delivered the kind of quarter that used to send its stock up double digits. Revenue for the three months to September rose 96% from a year earlier to $2.313 billion, the first quarter above $2 billion and about 20% more than in the second quarter, against analysts' estimate of about $2.18 billion, Fortune reported. Adjusted earnings were 44 cents a share against 41 cents expected, and the company raised its 2026 revenue forecast to $8.530 billion to $8.534 billion, about 91% growth, from as much as $8.2 billion before. Fourth-quarter guidance of $2.649 billion to $2.653 billion compares with a consensus near $2.46 billion.
The mix shifted in a way the company has promised for years. US commercial revenue, sales of its AI platform to American companies, rose 148% to $984 million and for the first time exceeded US government revenue, which grew 96% to $953 million. Palantir now expects US commercial revenue to grow 143% this year. The softer numbers were in bookings: total contract value rose 6% to $2.9 billion and US commercial contract value 11% to $1.5 billion, much slower than revenue, which is the figure analysts will watch to judge whether 2027 can look like 2026.
The market's answer was muted. The shares had closed the regular session down 3.13% at $178.34 as AI stocks sold off again; after the release they rose about 1.5% and then fell 3.6%, according to Fortune, and ended the evening near $173. Before the report, options had priced a move of about 11.65% in either direction, so the actual reaction was small, but in the wrong direction for a company that beat and raised on every line.
The reason is the starting price. Fortune put Palantir's market value at about $430 billion, roughly 50 times the revenue it now expects for 2026, a multiple that already assumes years of very fast growth. Chief executive Alex Karp called the results "extraordinary" and the growth "absolutely striking", and said every industry "will either be remade or set briskly aside" by AI. Investors did not disagree; they had simply paid for it in advance, during a week in which the Nasdaq lost 4% over five days on doubts about AI spending.
The lesson applies well beyond Palantir. When a stock is priced for perfection, the useful question after earnings is not whether the company beat, but whether anything in the report changes the long-run growth that the price assumes. Here the answer was mixed: revenue says yes, bookings say not yet. That combination usually produces exactly what happened, a small drop on a large beat.
Sources: Fortune — Palantir's revenue rises 96% to $2.3 billion as investors' patience rests on a hair trigger (Nov 2, 2026); SEC EDGAR — Palantir Technologies Form 8-K, Q3 2026 press release (Exhibit 99.1); TradingView News (StockStory) — Palantir reports bullish Q3 2026, full-year sales guidance is optimistic