Palantir Technologies (NASDAQ:PLTR) is approaching a critical moment with its upcoming earnings report scheduled for February 3, 2025. The stock closed at $82.49 to end last week, and with the company’s upcoming earnings report set to provide some big-time volatility ahead, with very divergent views on the company beginning to build in the market.

With a current consensus price target that’s 37% below current levels, it’s clear that most Wall Street analysts aren’t overly bullish about where this big data and AI stock could be headed from here. And given the recent headwinds the market is going to be pricing into all stocks (and in particular those who have run the furthest the fastest during this recent cycle, such as Palantir), next week could be a choppy one for investors in a range of stocks including Palantir.

Let’s dive into what’s likely to drive Palantir this coming week, and what investors may want to think about heading into this earnings report (set to be released after market close).

Key Points About This Article:

• Palantir is among the most high-octane growth stocks that has benefited investors willing to move out in the risk curve.
• Here’s why this is a stock that could have big downside risk in the days to come, and what investors may want to do moving forward.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

Is Palantir’s Surge to an All-Time High Overdone?

There are certainly plenty of reasons why Palantir has been such a notable performer over the past year, surging nearly 400% over this time frame. With a surge of more than 300% last year alone, fueled by consecutive quarters of revenue growth and sky-high demand (seen in its strong results), sky-high demand for AI stocks (and companies utilizing AI to grow their top and bottom lines at an accelerated rate) has continued.

Indeed, Palantir hit a record $84.8 stock price following with protracted tech sector rally. But despite its 412% one-year surge, analysts broadly consider the big data giant overvalued. The company boasts 81.1% gross margins and 24.5% revenue growth, driven by strong investor confidence in its data analytics and strategic partnerships. But if growth slows, there’s a decent likelihood the company’s multiple of 75-times sales is, shall we say, overdone.

Factor in tariff concerns and a surging U.S. dollar (with worries that bond yields will follow suit), and investors have reason to throttle back exposure to the highest-growth companies in the market and look for safer Bets. Analysts at Morgan Stanley are among those who have downgraded Palantir over valuation concerns, while Wedbush raised its price target to $90 (the outfit is known for being outright bullish in all market backdrops), so we’ll see who’s right.

I do think there are a number of reasons why investors may want to take a more cautious approach to companies like Palantir right now. With that said, let’s dive into what analysts are looking for with this company’s upcoming earnings report.

What to Expect on February 3

 

Palantir will release Q4 2024 earnings on after market close on February 3. Currently, analysts project the company will bring in $0.11 in EPS (up 37.5% year-over-year), and $778.89 million in revenue, a 28% increase. Strong AI and data analytics demand, along with its Nasdaq 100 inclusion, continue to drive outsized growth expectations.

Of course, if growth doesn’t materliaze as the market expects (and/or this company doesn’t beat to an outsized degree), I think analysts could be correct in their outwardly bearish view of this stock. Palantir’s growth depends on securing high-value government contracts, particularly in defense, where rising geopolitical tensions are driving AI demand. Expanding these contracts could stabilize revenue and reinforce its market position amid increasing competition, but it’s unclear exactly what progress has been made not here fronts. 

Moreover, its five-year AI partnership with BP highlights enterprise adoption, while collaborations with Anduril, SpaceX, and OpenAI strengthen its Pentagon contract prospects. These strategic moves have drawn investor attention, supporting Palantir’s market valuation and long-term expansion.

Palantir’s commercial growth is accelerating as enterprises adopt AI solutions, with converting pilot programs into full-scale deals key to sustaining momentum. Expanding margins could further strengthen its stock performance as analysts track customer acquisition and contract growth, but again, we’ll have to see how the numbers come in. 

Where Is Palantir Headed From Here?

Palantir has become a key player in AI and data analytics, drawing investor interest for its role in emerging technologies like quantum computing and AI-driven big data. Its government and enterprise partnerships strengthen its market position, while rising cybersecurity demand boosts its growth potential. As data privacy concerns grow, Palantir’s innovations could enhance its value and stock performance.

The company’s role in smart cities and autonomous systems could drive future valuation growth as urban technology advances. Its platforms, Foundry and Gotham, leverage AI and machine learning for predictive analytics, enabling users to process vast datasets efficiently. With scalable, interoperable solutions across sectors and ongoing quantum computing research, Palantir is positioned to transform data processing and enhance decision-making.

The company’s upcoming earnings report will be pivotal for investors looking to gauge where this stock is headed from here. Personally, I think the current macro backdrop is one that’s overtly bearish, suggesting investors may want to be more cautious with this name than in the past. It’s a stock that could certainly have big downside following its upcoming earnings report, so buyer beware.

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