From Yahoo Finance: 2025-05-09 11:15:00

Palantir stock fell 1.6% Friday and 5.6% for the trading week, sparking concerns about the company’s valuation. Shares plunged 12% Tuesday, wiping $35 billion off its market cap, as international sales dropped. However, shares rebounded midweek on news of a US-UK trade deal, adding $24 billion back to the market cap.

Palantir’s data analytics and AI software are used by various sectors, including military, government, and businesses. Despite criticism from human rights advocates and investors, the company’s software is utilized for surveillance, war planning, and more. The stock has surged 455% in the past year, driven by the AI boom.

Analysts warn of Palantir’s high valuation, with RBC Capital Markets and Jefferies predicting potential share price drops. Despite the boom in AI, DA Davidson analyst Gil Luria believes as long as the company performs well, the stock will continue to rise. However, the high valuation may lead to increased volatility.

William Blair analyst Louie DiPalma suggests Palantir’s shares may continue to rise due to government contract wins. The company recently secured a controversial $30 million contract with ICE and a $178 million contract with the US Army. However, revenue growth may slow in the future due to competitive pressures.

Palantir reported a 5% decline in international commercial segment revenue in the first quarter, citing challenges in Europe. The region’s slow investment in AI and push for tech sovereignty could impact Palantir’s business. The company’s alignment with the Trump administration may also deter some European buyers.

Read more: Palantir stock ends week down amid investor concerns over lofty valuation