Palantir Falls 6% Despite Earnings Beat and Raised Outlook; Datadog Drops 3%, Snowflake Slides 2%

A beat-and-raise quarter from Palantir Technologies (NASDAQ:PLTR | PLTR Price Prediction) isn’t getting a warm welcome on Wall Street. Palantir stock is at $167.94, down 6% in morning trading. That compares with a close of $178.34 on November 2, the session that ended just before the company released its Q3 2026 results.

On paper, the report met every goal: revenue and adjusted earnings per share (EPS) beat estimates, and Palantir raised its full-year outlook. What’s weighing on the shares is the slower sequential growth built into the company’s Q4 2026 forecast. Several of Palantir’s earlier earnings beats were also followed by declines, so the reaction fits a familiar pattern.

Palantir’s Q3 2026 Results Topped Wall Street’s Forecasts

Palantir disclosed on November 2 that its Q3 revenue reached $2.313 billion, up 96% year over year (YoY). That cleared Bloomberg’s $2.17 billion consensus estimate. Adjusted EPS at Palantir came in at $0.44, beating Yahoo Finance’s $0.40 consensus estimate. It was the company’s 10th consecutive EPS beat.

The biggest milestone came from Palantir’s U.S. commercial business, where revenue jumped 148% YoY to $984 million. For the first time, U.S. commercial sales topped Palantir’s U.S. government revenue, which rose 96% to $953 million.

CEO Alex Karp addressed analysts. He told them the commercial results were “out of bounds.” Management raised Palantir’s full-year 2026 revenue outlook to a range of $8.530 billion to $8.534 billion, above Yahoo Finance’s $8.2 billion analyst estimate. A higher full-year U.S. commercial revenue target of more than $3.559 billion rounded out Palantir’s raised guidance.

Guidance from Palantir calls for Q4 revenue of $2.65 billion, which also beat estimates. However, per Yahoo Finance, the forecast implies 15% quarter-over-quarter growth, slower than the 20% pace in the same period last year. Slowing sequential growth is a hard sell for a stock priced for acceleration, and that’s the tension behind the selloff.

Datadog and Snowflake Slip Less Than Palantir

Software stocks are lower across the board, but Palantir’s decline is the largest of the group. Datadog (NASDAQ:DDOG) stock is at $209.77, down 3%. Meanwhile, Snowflake (NYSE:SNOW) stock is at $284.85, down 2%.

A fresh earnings report gives Palantir its own reason to reprice, on top of the mood across the sector. All three stocks slid sharply over the past week in a broader software and artificial intelligence selloff. Over that stretch, Datadog fell even harder than Palantir, which undermines the case that Palantir’s slump is purely a reaction to its own report.

Smaller government-focused names are holding up better. BigBear.ai (NYSE:BBAI) stock is inching higher.

Pressure on technology extends past software. Shares of Apple (NASDAQ:AAPL) are sliding after the company’s November 2 report included a weak gross-margin outlook tied to higher memory costs and Siri AI expenses. Jitters over artificial intelligence spending have also weighed on software, and the U.S. midterm elections on November 3 could add near-term volatility.

How Palantir’s Model Differs From Datadog and Snowflake

Palantir sells its Foundry, Ontology and AIP platforms to U.S. government agencies and large enterprises. It positions them around what it calls Sovereign AI. Those contracts tend to involve long sales cycles and hands-on deployment work.

Datadog runs an observability and monitoring platform sold as software as a service (SaaS), with pricing tied to usage. Snowflake operates a cloud data platform that charges by consumption, so its revenue rises and falls with how much data customers process. Both models follow customer activity closely, while Palantir’s larger contract wins can make its quarterly signals lumpier.

Valuation also separates the three, since the market gives Palantir a far higher multiple than Datadog or Snowflake, and that premium leaves less room for any wobble in the company’s growth path.

Palantir’s Beat-and-Raise Quarter Faces Its Next Test

Palantir’s Q4 results will show whether sequential growth picks back up from the pace its forecast implies. Bulls can point to net dollar retention of 165%, a Rule of 40 score of 158% and a higher outlook for revenue, adjusted operating income and adjusted free cash flow.

Bears see warning signs beneath the beat. Palantir’s price-to-earnings (P/E) ratio of 252x leaves little margin for error. The company’s total contract value grew just 6% YoY to $2.918 billion. CFO Dave Glazer said several eight-figure deals were “shorter in duration than usual,” though he expects contract length and size to grow over time. Stock-based compensation at Palantir rose to $318.9 million in Q3 from $172.3 million a year earlier.

Shareholders focused on the long-term story have strong fundamentals on their side, while short-term momentum has turned against the stock. Near-term volatility could continue until the debate over Palantir’s sequential growth resolves.

Contact [email protected] for any questions or corrections.