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Palantir Shares Tumble Over 13% Despite Revenue Beat and Upgraded Forecast

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Palantir Technologies (PLTR.O) saw its stock plunge more than 13% on Tuesday, as investors reacted negatively to quarterly results and a raised full-year forecast that fell short of Wall Street’s elevated expectations. This comes after the stock had soared 63% year-to-date, following a quadruple gain in 2023, driven by optimism around its AI capabilities and government contracts.

The Denver-based data analytics firm reported first-quarter revenue of $883.9 million, a 39% year-over-year increase, and above analyst expectations of $862.8 million, according to LSEG. U.S. government revenue surged 45%, highlighting continued momentum in federal and defense sectors.

Despite the beat, analysts say the market had already priced in strong performance, leaving little room for upside. “We believe we have reached a point where respectable earnings beats and raised guidance aren’t enough to materially move the stock to the upside,” said Morningstar analyst Mark Giarelli.

Palantir now forecasts 2024 revenue between $3.89 billion and $3.90 billion, up from the prior estimate of $3.74 billion to $3.76 billion. The company also noted a record number of $1 million+ deals, with strong customer growth in U.S. commercial sectors such as healthcare, energy, and automotive.

However, valuation concerns are mounting. Palantir’s 12-month forward P/E ratio stands at 202.07, significantly higher than that of industry peers like Snowflake (131), Datadog (54.81), and Salesforce (23.48). If the stock decline holds, the company is poised to shed over $40 billion from its $292 billion market cap.

Despite the sell-off, at least nine brokerages raised their price targets for Palantir post-earnings, pushing the median target to $96.46 — a sign of continued long-term confidence in the firm’s AI-driven growth.

SoFi Shares Fall After KBW Downgrade on Valuation Concerns

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Shares of SoFi Technologies (SOFI.O) dropped 6% on Thursday following a downgrade from KBW, which raised concerns over the fintech firm’s high valuation and ambitious financial targets. KBW analysts downgraded the stock to “underperform” and set a price target of $8, nearly half of SoFi’s most recent closing price.

The downgrade highlights the challenges faced by startups like SoFi, a digital banking and brokerage platform offering loans, credit cards, and investment services, as they transition into established financial service providers. KBW noted that while the economy is strong, interest rates are low, and SoFi has shown growth in scale and profitability, the stock’s valuation has become “overstretched” across various financial multiples.

Analysts expressed skepticism about SoFi’s ability to meet its 2026 earnings per share forecasts and its long-term target of a 20%-30% return on tangible common equity (ROTCE), deeming these goals difficult to achieve. The company’s stock was last trading at $14.53, and if current levels hold, it is poised to close out its fourth consecutive session of losses. Since October, the stock had nearly doubled in value.

SoFi’s valuation stands at 69 times expected earnings for 2025, compared to the median of 12.2 times for consumer digital lenders, according to KBW.

SoFi did not immediately respond to requests for comment.