Analyst updates Palantir stock forecast before key earnings

Analyst updates Palantir stock forecast before key earnings originally appeared on TheStreet.

Palantir  (PLTR) , the hot AI stock that’s doubled this year, is making waves again.

The company has recently secured another contract with the U.S. Army worth up to $10 billion over the next ten years.

According to a release, Palantir will improve the Army’s operational efficiency by creating a “comprehensive framework for the Army’s future software and data needs.”

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The deal consolidates multiple contracts into a single enterprise agreement, giving the Army more flexibility in purchasing software and services. It also reduces procurement delays and contract-related fees.

Palantir is known for providing AI-driven data analytics software to the U.S. government, military, and commercial clients. The stock soared 340% in 2024 as demand for AI infrastructure surged across sectors.

Investors are now watching closely ahead of the company’s second-quarter earnings report, which is set for August 4 after the bell.

Three months ago, Palantir delivered robust earnings for the first quarter and issued a strong forecast for the second, yet the stock tumbled 12% on the following trading day.

Palantir’s first-quarter revenue beat was primarily fueled by robust U.S. sales, which rose 55% year-over-year. U.S. commercial revenue jumped 71%, while government revenue grew 45%. U.S. revenue accounted for about 71% of the total.

Related: Analysts turn heads with new Alphabet stock price target after earnings

“We are in the middle of a tectonic shift in the adoption of our software,” CEO Alex Karp said. “We are delivering the operating system for the modern enterprise in the era of AI. Consequently, we are raising our full-year guidance for total revenue growth to 36% and our guidance for U.S. commercial revenue growth to 68%.”

Palantir projects second-quarter revenue of $934 million to $938 million, surpassing the consensus estimate of $899.1 million.

Just days ahead of its second-quarter earnings report, Palantir was trading near record levels. On July 31, the stock reached an all-time intraday high of $160.89. It closed at $154.27 on August 1, weighed down by a broader market slump.

With that sharp surge, investors question whether Palantir’s valuation is running too far ahead of its fundamentals.

The stock currently trades at 277x forward earnings, well above other software providers like Microsoft  (MSFT) , which is 34x, and Salesforce  (CRM) , which is 22x.