Palantir Technologies Inc. (NYSE: PLTR) has had a rollercoaster ride in 2025, soaring on strong AI-driven revenue growth before pulling back amid Pentagon budget cuts and broader market weakness. Despite the recent selloff, Wall Street analysts remain bullish on Palantir’s long-term potential, citing its dominance in enterprise AI and expanding commercial footprint.
Palantir’s Blowout Q4 Earnings Beat Expectations
In early February, Palantir posted fourth-quarter 2024 results that smashed Wall Street estimates, fueling a massive stock rally. The company reported:
- Adjusted earnings of $0.14 per share, beating the consensus estimate of $0.11.
- Revenue of $828 million, up 36% year-over-year, exceeding the forecasted $776 million.
- Full-year 2024 revenue surged 29% to $2.87 billion.
Palantir also raised its 2025 guidance, projecting sales between $3.74 billion and $3.76 billion, well above analysts’ estimates of $3.52 billion.
Stock Hits Record High Before Pullback
Following the impressive earnings report, Palantir’s stock skyrocketed, hitting a closing high of $124.62 on February 18—its highest level in over a year. The rally was fueled by growing demand for AI-powered data analytics, especially from U.S. government contracts and expanding commercial adoption.
However, the stock has since pulled back 30% to $86.24, impacted by:
- Pentagon budget cuts, reducing government contract spending.
- CEO Alex Karp’s stock-sale plan, which added selling pressure.
- The broader Nasdaq correction, with the index dropping 11% in the past month.
Analysts Remain Bullish on Palantir’s AI Leadership
Despite the recent dip, Loop Capital reiterated its buy rating on Palantir, though it lowered its price target from $141 to $125. The firm sees Palantir as a pioneer in enterprise AI, highlighting its role in helping businesses scale small pilot AI programs into full production.
Loop Capital noted that AI adoption is at a tipping point, with use cases expanding rapidly across industries, making Palantir well-positioned for long-term growth.
Palantir Stands Out Amid Tech Selloff
While the broader tech sector faces pressure from falling revenue estimates—not tariffs, as per Dan Niles, founder of Niles Investment Management—Palantir’s resilient financials and bullish guidance set it apart.
With its strong government contracts, expanding commercial presence, and dominant AI position, Palantir remains a key player in the rapidly growing enterprise AI market, despite the short-term market volatility.
