(Bloomberg) — The setup ahead of Palantir Technologies Inc. earnings is a familiar one: The stock hovers around a record and boasts the highest price-to-earnings ratio on the S&P 500 Index.<\/p>\n
Most Read from Bloomberg<\/p>\n
Wall Street has long been leery of Palantir\u2019s runaway valuation. More than twice as many analysts assign the stock sell or hold ratings than buy. Its forward price-to-earnings ratio is 229, more than double the second-priciest tech company \u2014 Crowdstrike Holdings Inc. \u2014 and eight times as expensive as tech peers. Shares advanced about 4% in mid-day Monday trading.<\/p>\n
Even so, investors have kept plowing money into the stock, which also boasts a large retail following. Bulls have looked past the eye-watering P\/E ratio to home in on Palantir\u2019s growth potential given its ties to the US government, its growing commercial offerings and use of artificial intelligence.<\/p>\n
That exuberance is spurring some unease. If Palantir wants to satisfy investors, it has a high bar to clear when it reports after the close on Monday.<\/p>\n
\u201cThe company is now in a position where they have to blow out numbers,\u201d Ted Mortonson, managing director at Robert W Baird & Co Inc., said. \u201cThey just have to absolutely annihilate the Street.\u201d<\/p>\n
Gil Luria, DA Davidson\u2019s head of technology research, pointed to Palantir\u2019s last several quarters, where it \u201ceasily\u201d beat earnings estimates. The company seems to have \u201cmore momentum than any other publicly traded software company,\u201d with expectations \u201cas high as ever,\u201d he said.<\/p>\n
He cites the company\u2019s estimated organic revenue growth rate of 35% this year, which is the highest among the 100+ software companies he tracks. Palantir also has the highest expected free cash flow, at a 42% margin.<\/p>\n
Still, Luria says he\u2019s \u201cvery aware of the sky-high valuation,\u201d which is why his firm rates Palantir stock neutral.<\/p>\n
Analysts will be assessing Palantir\u2019s efforts to grow its government businesses, both with the US and other countries. That includes Palantir bull Daniel Ives, at Wedbush Securities, who highlighted a recent US Army deal worth up to $10 billion as an \u201cadditional tailwind.\u201d<\/p>\n
On the commercial side, Luria says the company \u201cwill need to build on the success they have had with their AI pilot program and convert all those new customers to longer-term relationships.\u201d<\/p>\n
Plus, Palantir will also increasingly have to contend with a \u201crising talent war\u201d for capable AI professionals, Luria warns. In recent weeks, Alphabet Inc.\u2019s Google was said to have struck a deal to pay about $2.4 billion for top employees and licensing rights from AI coding startup Windsurf, while Meta Platforms Inc. made unusually high compensation offers to new members of its \u201csuperintelligence\u201d team \u2014 including a more than $200 million package for a former Apple Inc. engineer.<\/p>\n
Story Continues <\/p>\n
There are reasons to hold Palantir stock even though it\u2019s expensive, said Jim Worden, chief investment officer at the Wealth Consulting Group. Palantir could be at an \u201cApple moment,\u201d like when the iPhone first came out, he added.<\/p>\n
\u201cI hear all the people that say it\u2019s super expensive, it\u2019s priced for perfection,\u201d Worden said. \u201cIf they\u2019re in this Apple moment, which they very well could be\u201d \u2014 with a billion dollars a quarter in revenue rising to $10 billion, then $20 billion \u2014 the company could grow into its valuation, he said.<\/p>\n
Top Tech Stories<\/p>\n
Apple has a new \u201cAnswers\u201d team developing a stripped-down rival to ChatGPT to help users access world knowledge.<\/p>\n
Amphenol Corp. is nearing an acquisition of CommScope Holding\u2019s broadband connectivity arm in a deal valued at roughly $10.5 billion including debt, the Wall Street Journal reported on Sunday, citing people with knowledge of the matter.<\/p>\n
Apple Inc. Chief Executive Officer Tim Cook, holding a rare all-hands meeting following earnings results, rallied employees around the company\u2019s artificial intelligence prospects and an \u201camazing\u201d pipeline of products.<\/p>\n
Xiaomi Corp. on Monday released an open-source voice model to complement its automotive and home appliance technologies, further heating up the race to build AI tools for more than just text.<\/p>\n
Earnings Due Monday<\/p>\n
Earnings Premarket:<\/p>\n
Earnings Postmarket:<\/p>\n
Palantir Technologies Inc. (PLTR US)<\/p>\n
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IAC Inc. (IAC US)<\/p>\n
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IAC Inc. (IAC US)<\/p>\n
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–With assistance from Carmen Reinicke, Subrat Patnaik, Brandon Harden and David Watkins.<\/p>\n
(Updates shares.)<\/p>\n
Most Read from Bloomberg Businessweek<\/p>\n
\u00a92025 Bloomberg L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"(Bloomberg) — The setup ahead of Palantir Technologies Inc. earnings is a familiar one: The stock hovers around…\n","protected":false},"author":2,"featured_media":58448,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[7904,28,2197,43987,43986,24255],"class_list":{"0":"post-58447","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-bloomberg","9":"tag-business","10":"tag-crowdstrike-holdings-inc","11":"tag-earnings-estimates","12":"tag-palantir-stock","13":"tag-palantir-technologies"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/58447","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=58447"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/58447\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/58448"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=58447"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=58447"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=58447"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}