Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomePMN BusinessPalantir Is Stuck in Worst-of-Both-Worlds Bind With AI, SoftwareIt’s been a sobering stretch for Palantir Technologies Inc. shareholders, who have watched their once high-flying positions lose more than 40% of their value since the stock hit a peak in November.Author of the article: You can save this article by registering for free here. Or sign-in if you have an account.w9k11i6r{nroh)b3ko3ba{}m_media_dl_1.png Bloomberg(Bloomberg) — It’s been a sobering stretch for Palantir Technologies Inc. shareholders, who have watched their once high-flying positions lose more than 40% of their value since the stock hit a peak in November.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorStrong results when the company reports its second-quarter earnings after the bell on Monday could reverse that trend. But Wall Street pros aren’t exactly betting on it.“It will have to be a really good quarter for the stock to stay afloat,” said Luke Rahbari, chief executive officer of Equity Armor Investments, which holds Palantir. “The question is, how much does Palantir have to hit it out of the park for the stock to go back up the way it used to? Is that kind of revival even possible, with sentiment so negative?”Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againThe thing is, Palantir is already expected to knock these earnings out of the park. The data-mining software developer is projected to post a 143% rise in net income for the second quarter on an 80% leap in revenue. The company also builds artificial intelligence platforms, and its free cash flow, an increasingly important metric for AI firms, is seen doubling to $1 billion.Still, investors are skeptical that this will be enough to change the narrative around the stock.“Everything is uncertain and feels negative,” Rahbari said. “Palantir would have to really charm me for me to want to be adding here. It would have to meet all the numbers and give really good guidance. Both sides of the story — the fundamentals and the valuation — are facing a lot of scrutiny right now.”Palantir’s stock market valuation is something of a puzzle. On the one hand, it has gotten significantly cheaper during the selloff. The shares are priced at roughly 67 times earnings projected over the next 12 months, down from a high of 247 on Oct. 31 and below their five-year average of 98. However, that still puts the company among the 15 most expensive members of the S&P 500 Index. And based on price-to-sales ratio, it’s the most expensive stock in the benchmark.That dynamic, where the shares are getting less expensive but aren’t close to what anyone would call cheap, is why these earnings really matter — and why so many investors are unsure they’ll make a difference for their positions.“We’re in a damned-if-you-do, damned-if-you-don’t situation this earnings season,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott, which owns Palantir shares. “If you miss, obviously you’ll see your stock plunge. But even if you deliver good results, I’m not sure that will be enough to satisfy the shift in sentiment.”Of course, there are still plenty of Palantir bulls on Wall Street. Of the 33 analysts tracked by Bloomberg who cover the stock, 22 have buy ratings. Its consensus price target of $189 implies that the shares will rise more than 50% over the next 12 months.While the company looks “pretty solid” coming into earnings, the stock’s “superhuman” valuation is a concern, according to Daniel Morgan, portfolio manager at Synovus Trust, who owns the shares personally and professionally. However, the price may be justified, he added. “You’re looking at a company that’s growing sales substantially higher than the S&P 500,” Morgan said. It’s “trading at a huge premium that’s being awarded to them because of this monster-size top line growth.” He also cited its relatively strong free cash flow as a factor in its favor. Palantir’s underperformance relative to the iShares Expanded Tech-Software Sector ETF, better known by its ticker IGV, “makes the risk/reward more attractive,” Citi analyst Tyler Radke wrote in a note to clients on June 23. His checks during the quarter were also “positive” across the company’s commercial and federal government businesses, Radke said.However, the risks facing the company are real and global. Palantir may face investigations over its ties to the Trump administration if Democrats get control of one or both house of Congress in the November midterm elections. In addition, European politicians and military officials may seek to strip out Palantir’s software from their systems due to its data practices and closeness to Trump. Since the US accounts for the majority of Palantir’s revenue, about 74% in 2025, Synovus’s Morgan said he’s unconcerned about a potential backlash in countries like the UK and France, as the US accounts for the majority of Palantir’s revenue. Which brings the issue back to Palantir’s earnings. Overall, tech results have been robust this quarter. And software and tech-services companies have generally been topping expectations, as have mega-cap tech firms. So the company is seemingly set up for a positive report. Whether it will matter for the stock, however, remains an open question. “Palantir is a show-me story,” Equity Armor’s Rahbari said. “If the guidance indicates that things are uncertain going forward, boy will that be disappointing.”Tech Chart of the DayTop Tech StoriesAlibaba Group Holding Ltd. released its biggest ever AI model, claiming performance on par with global leader Anthropic PBC in the latest Chinese breakthrough to challenge US rivals.China Mobile Ltd. is considering selling its minority stake in Thailand’s telecommunications company True Corp., according to people familiar with the situation.Alphabet Inc., Meta Platforms Inc., Microsoft Corp. and Amazon.com Inc., the four largest players in the data center race, have committed nearly $2.4 trillion in spending over the coming years, pointing to massive ongoing investment in AI infrastructure.Zepto Ltd said it agreed on a private share sale to major investors as the Indian quick-commerce firm pushed back plans for an initial public offering after failing to secure its anticipated valuation.Earnings Due Earnings Premarket: American Bitcoin Corp. 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