Palantir’s Shares Experience a 13.3% Drop After Reporting First Quarter Results
The first quarter of 2025 has come to an end for Palantir, a data-mining and analytics company that operates on the New York Stock Exchange under the ticker symbol PLTR. The company reported its quarterly results, which were met with high expectations from investors. However, the stock price took a significant hit, plummeting by 13.3% in the afternoon session. Despite beating analysts’ revenue and adjusted operating income expectations, as well as raising full-year guidance on both metrics, the market’s reaction was lukewarm.
The Quarter’s Performance
Palantir’s first quarter results were nothing short of impressive. The company exceeded analysts’ expectations in terms of revenue and adjusted operating income. Furthermore, Palantir raised its full-year guidance for both revenue and adjusted operating income. This demonstrates that the company is performing well, at least on paper. However, the market’s reaction suggests that something else might be at play.
Market Overreaction
The stock market is notorious for overreacting to news. Big price drops can present good opportunities to buy high-quality stocks. In this case, Palantir’s shares closed the day at $108.84, down 12.2% from the previous close. This significant drop might be an overreaction by the market. The question on everyone’s mind is: is now the time to buy Palantir?
Palantir’s Volatility
Palantir’s shares are extremely volatile and have had 44 moves greater than 5% over the last year. These big price swings indicate that this news significantly impacted the market’s perception of the business. The previous big move we wrote about was 12 days ago when the stock gained 6.6%. This was part of a broader trend where stocks were rebounding, led by strong gains in the technology sector.
Contributing Factors
The optimistic tone in the market can be attributed to several factors. One of these is the standout earnings report from enterprise software leader ServiceNow. The company topped Wall Street’s expectations on both revenue and earnings. More importantly, its remaining performance obligations (RPO) exceeded forecasts. This gave investors confidence that enterprise customers are not pulling back spending amidst uncertain macroeconomic conditions.
Additional Contributors
Other companies like Texas Instruments and Lam Research also reported solid results. Their performance was especially encouraging for semiconductor stocks, which have been under pressure due to global trade tensions. These results suggested that demand in key tech verticals remained resilient, despite macroeconomic uncertainties.
Palantir’s Performance So Far
Since the beginning of the year, Palantir has seen its shares rise by 43.6%. However, at $107.90 per share, it is still trading 13.4% below its 52-week high of $124.62 from February 2025. Investors who bought $1,000 worth of Palantir’s shares at the IPO in September 2020 would now be looking at an investment worth $11,368.
Thematic Investing
The potential of thematic investing is undeniable. Diverse winners like Microsoft (MSFT), Alphabet (GOOG), Coca-Cola (KO), and Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. In that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI.
A Promising Growth Story
The company in question is a relatively unknown player in the market but has been making waves due to its innovative approach to AI. With a strong track record and a clear plan for expansion, this company has all the hallmarks of a promising growth story. We’ve put together an analysis report on this company, which you can access here.
Conclusion
Palantir’s first quarter results were impressive, but the market’s reaction was lukewarm at best. The stock price took a significant hit, plummeting by 13.3% in the afternoon session. However, with its strong performance and clear plan for expansion, Palantir remains an attractive investment opportunity. Whether now is the time to buy shares or not is up to individual investors to decide.