To The Moon

On ‘04 May 2026, $Palantir Technologies Inc.(PLTR)$ handed in its Q1 2026 quarterly earnings report.

The financial results were actually very strong.

Yet, last week still saw PLTR falling by more than -6.50%. (see below)

Are there hindering factors ? Let’s investigate.

Q1 2026 Earnings.

Below is PLTR’s 2026 first quarter earnings versus estimates collated by LSEG:

• Earnings per share (adjusted): came in at $0.33 vs analysts’ estimates of $0.28 vs Q1 2025’s $0.13; that’s a +153.85% YoY gain.

• Revenue: came in at $1.63 billion vs Wall Street consensus of $1.54 billion vs Q1 2025’s $0.884 billion; that’s a +85% YoY growth.

• Net Income (GAAP): came in at $870 million vs Q1 2025’s $214 million; that’s a +306.73% YoY increase.

• Operating Income: was $754 million vs Q1 2025’s $176 million; that’s a +328.29% YoY increase.

• Free Cash Flow (adjusted): was $925 million vs Q1 2025’s $370.4 million; that’s a +149.77% YoY increase.

• Margin Expansion: Gross profit was $1.42 billion vs Q1 2025’s $0.711 billion; that’s a +99% YoY increase.

Q2 2026 Forecast.

• Revenue: estimated to be between $1.797 - $1.801 billion vs analysts’ forecast of $1.68 billion, surveyed by LSEG.

• Operating income (adjusted): has been forecasted to be $1.063 - $1.067 billion.

FY 2026 Estimates.

• Free Cash Flow (adjusted) : revised to between $4.2 - $4.4 billion in adjusted free cash flow, above StreetAccount’s $4.05 billion consensus and higher than earlier February 2026’s estimates of between $3.925 - $4.125 billion.

• Revenue: sees an upwards revision to between $7.65 - $7.66 billion vs LSEG consensus of $7.27 billion vs company’s February 2026 guidance of between $7.182 - $7.198 billion; that’s a +71% YoY increase.

• US Commercial revenue: estimated to be $3.224 billion vs FY 2025 actual’s $1.465 billion, this will be a +121.43% YoY growth.

• Operating Income (adjusted): is expected to be between $4.440 - $4.452 billion.

Deep Dive.

Despite strong first-quarter earnings results on Monday after market closed, data-wrangling software company PLTRs shares fell Tuesday and overall for the week.

While Palantir beat Wall Street expectations on all its key metrics -- sales, adjusted operating margin, and adjusted free cash flow margin etc, analysts at $Jefferies Financial Group Inc.(JEF)$ were quick to point out the weak spots, conveniently ‘avoided’:

• First off were the slight miss in US Commercial segment and the first deceleration seen in the last 2 years.

• Palantir reported commercial sales of $595 million, but analysts were expecting closer to $605 million; that’s a -1.65% off estimates.

• They also called out current Q2 2026's guidance for not being high enough.

CEO’s Say.

The company and CEO Alex Karp have in recent times, become political lightning rods, but that didn't slow the company down in the first quarter.

PLTR is the rare exception of a company that can grow sales by +85% and still garner adjusted profit margins over +50%.

In a letter to shareholders, CEO, Alex Karp laid out:

• Our financial results (now) demonstrate a level of strength that dwarfs the performance of essentially every software company in history at this scale.

On Tue, 05 May 2026 (post earnings announcement), PLTR closed down -6.9% at $135.91 /share.

YTD, PLTR shares have fallen -23% (as of 05 May 2026), but have risen around seven fold over the past 2 years - putting things into perspective.

The muted move after earnings is unusual for PLTR.

Historically, in the past 10 quarters, the average stock move was +16%.

Apart from a stellar Q1 2026 earnings that outperformed most of its software peers, PLTR management has significantly raised its guidance for FY 2026 as well.

With roots in US defense and intelligence work, America remains PLTR's core market.

While much of the coverage of PLTR revolves around its government contracts, it is actually PLTR's US commercial sales that have been the star of the show. (see below)

Segment Growth Analysis:

Enclosed is a breakdown of PLTR’s Q1 2026 US revenue into its component of (a) commercial and (b) government, as proof that company’s growth is not 100% reliant on government projects per se. (see above)

For Q1 2026, US revenue was $1.28 billion of company’s total revenue ($1.63 billion):

US Government revenue.

• Contributed $687 million vs Q1 2026’s $373 million; that’s a +84.2% YoY increase.

US Commercial revenue

• Constituted $595 million vs Q1 2025’s $255 million, that’s up about +133.3% YoY increase.

• Analysts are projecting US commercial sales to rise by +137% from last year to $605 million.

In short, US sales accounts for approx. 78% of total revenue, that is split between government contracts (42%) and commercial business (36%).

Comparatively speaking, in Q1 2026, commercial revenue enjoyed a faster growth compared to government revenue.

Valuation Bias.

Because it garners such a high valuation, with the stock trading at 97x earnings per share for the next 12 months, PLTR gets judged not on whether it beats expectations (11 quarters in a row - just for the record), but by how much (quantum) it beats.

The stock is frequently volatile after earnings, as investors decide what to make of the report.

According to Cantor Fitzgerald, MD cum Analyst, Thomas Blakey:

• PLTR reported another strong quarter with upside driven by accelerating US demand, continued AIP (Artificial Intelligence Platform) adoption, and continued operating leverage.

• Strangely, he reiterated a “Neutral” rating and $138 target price on PLTR.

• He acknowledged that while PLTR's results indicate stronger revenue than previously forecast, valuations of software companies are currently under pressure.

According to Jefferies, Snr software analysts, Brent Thill :

• A long time fan of PLTR’s financial performance, but skeptical of its valuation.

• He continues to view risk/reward as unfavourable.

• PLTR's fundamentals are exceptional, but the stock requires a heroic durability assumption to justify the current multiple.

• He believes PLTR remains vulnerable to (a) any moderation in AI enthusiasm or (b) even modest headline deceleration.

• He has an “Underperform” rating and a pessimistic $70 price target on the stock.

PLTR’s Strength.

PLTR software takes an organization's data, that may be spread out across many different systems and formats, and uses its proprietary AI to (a) draw relationships between disparate data points and (b) aid customers in decision-making.

It is one of few companies that has healthy profit margins selling AI services.

Despite that, PLTR stock has come under the same sorts of pressures as other software companies due to the narrative that "AI will eat software".

In the past 6 months, Palantir declined by -23%, while the S&P 500 is up by +7%.

The theme of PLTR's releases and the scripted portion of the earnings call was that PLTR's framework for using AI, grounded in an organization's data, makes it a "non-slop-zone" and not make the same mistakes as other AI tools.

Karp, who has a PhD in philosophy, is no ordinary CEO.

PLTR's software architecture mirrors concepts from philosophy like ontology - a branch of metaphysics concerned with reality and existence.

At PLTR, Ontology is the core truth of an organization's data that everything else is based.

In Karp’s letter to shareholders, he said:

• PLTR is a protector of high-quality data against the rising tide of low-quality, AI-generated filler.

• PLTR’s system, known as the "Ontology" stays rooted in the real world.

• The software works by balancing (a) hard facts, (b) specialized expertise of a company’s employees and (c) modern digital improvements.

Will PLTR Still Be Falling ?

Will PLTR be still on a downwards trend ?

Will defer to its (a) Simple Moving Averages of 20-day, 50-day and 200-day, (b) MACD and (c) RSI for clues. (see above)

Simple Moving Averages (SMA).

On Fri, 8 May 2026 PLTR ended the week at $137.80 /share, that is below its SMA of 20-day ($141.23), 50-day ($145.70) and 200-day ($163.93).

The SMA technical indicator suggests a bearish trajectory across the short, intermediate, and long term as current stock price is way below all 3 primary moving averages and it had a “death cross” formation back in February 2026.

The stock is showing clear downwards momentum, with the 20-day SMA acting as the resistance level.

MACD.

Both MACD line (-1.98) and Signal line (-1.54) are below the Zero line, indicating short-term momentum is weaker than long-term momentum and confirms a prevailing downtrend.

With the MACD line below the Signal line, a bearish crossover that indicates an accelerating downward momentum.

With Divergence of -0.44, it means the gap between the MACD line and the signal line is widening, indicating increasing selling pressure and decreasing buying conviction.

RSI.

PLTR’s 14-day RSI is at 45.69, that is neutral, technically balanced territory, neither overbought nor oversold.

It indicates a cooling-off period following previous volatility, where the stock has moved away from overbought conditions without yet falling into a deeply oversold, panic-selling zone.

Personal View.

While PLTR’s valuation debates continue to persist amongst analysts, PLTR has undergone a fundamental transformation into a high-margin software powerhouse.

The shift is driven by its Artificial Intelligence Platform (AIP) and the company’s "bootcamp" strategy, that compressed sales cycles from months to days.

After conducting over 1,300 bootcamps in 2024, compared to just 92 pilots in 2023, operational efficiency has soared.

This is reflected in the "Rule of 40" score, that climbed from 57% in Q1 2025 to a remarkable 68% in Q1 2026 (based on 85% revenue growth and a 17% GAAP operating margin).

The underlying strength is evidenced by aggressive customer acquisition, particularly in the US commercial base that grew by +69% YoY in 2025 and is now approaching 1,000 total customers.

Financially, PLTR remains debt-free with a $4 billion cash reserve, enabling record trailing 12-month free cash flow.

By utilizing its "Ontology" to decouple revenue growth from headcount, the firm has moved beyond human-intensive consulting toward scalable automation.

As the global economy plunges headlong into an era defined by machine intelligence, PLTR stands as the indispensable architect capable of turning the chaotic tide of AI into a structured, profitable, and reality-grounded future.

To sum up, there is no immediate threats to PLTR's long-term growth prospects.

Although valuation is still a challenging big question mark, the company seems to evolve as core AI infrastructure.

I believe that PLTR’s fundamentals justify the accumulation of shares on weakness despite high expectations. Agree ?

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• Do you think analysts have been bias when assessing PLTR on its earnings and merits ?

• Do you think PLTR’s future and relevance in an AI-driven world remains solidly grounded ? I do !

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