Palantir Falls 6% Despite Earnings Beat and Raised Outlook; Datadog Drops 3%, Snowflake Slides 2%
The software company beat revenue and earnings estimates and lifted guidance, but investors focused on rising stock-based compensation and slower contract growth.
- On Tuesday, Palantir Technologies shares dropped 6% to $167.94, despite reporting Q3 2026 revenue of $2.313 billion on November 2, up 96% year-over-year.
- Management raised Palantir's full-year 2026 revenue outlook to $8.534 billion after posting its 10th consecutive earnings beat, with Adjusted EPS hitting $0.44 against Yahoo Finance's $0.40 estimate.
- U.S. commercial revenue jumped 148% to $984 million, surpassing Palantir's U.S. government revenue of $953 million for the first time, with full-year commercial target raised to more than $3.559 billion.
- Amid jitters over artificial intelligence spending, software stocks faced broader selling pressure; Datadog fell 3% to $209.77 and Snowflake fell 2% to $284.85, though Palantir's decline was largest.
- Guidance from Palantir calls for Q4 revenue of $2.65 billion, while bulls point to net dollar retention of 165% and a Rule of 40 score of 158%, supporting higher operating income outlook.
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Palantir Technologies reported results from the third quarter above market expectations, driven by strong growth in sales to corporate customers. Still, the company's shares fell on Tuesday (3) after a long teleconference of results with CEO Alex Karp, who failed to dispel investor concerns. Exclusive material for subscribers. To have full access, access the link of the subject and register.
Watch Palantir Growth Slows From Breakneck Pace
Palantir Technologies expects revenue of roughly $2.65 billion in the three months ended Dec. 31. While that beat the $2.46 billion average of analysts’ estimates, the guidance translates into a roughly 15% quarter-over-quarter gain, falling well below the 20% increase the firm enjoyed in the last period. Ed Ludlow reports on "Bloomberg Open Interest."
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BizTocPalantir Falls 6% Despite Earnings Beat and Raised Outlook; Datadog Drops 3%, Snowflake Slides 2%
Palantir posted its tenth straight earnings beat and lifted its full-year outlook, yet the stock is sinking anyway. The reason hiding inside the guidance helps explain why a perfect quarter is sending shares lower.
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