Palantir Technologies (PLTR) just posted one of the strongest quarters in its history. Revenue grew 93% year-over-year (YoY), the fastest pace the company has ever reported, driving shares higher by more than 20% the day after the Q2 report. Yet not everyone on Wall Street is celebrating.
Jefferies analyst Brent Thill kept his "Underperform" rating on the stock, and his reasoning is worth paying attention to if you own shares or are thinking about buying in. Dear Intel Stock Fans, Mark Your Calendars for August 12 Ahead of Nebius Earnings, Here's What Barchart Data Says Comes Next for NBIS Stock Nvidia's Best Customers Have a Reason to Stop Buying So Many Nvidia Chips Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines.
Here is what PLTR investors need to know about the split opinion forming around one of the market's hottest AI stocks. Jefferies raised its price target on PLTR stock slightly, to $80 from $70. However, the investment firm kept its "Underperform" rating in place, meaning it still expects the stock to lag the market.
"We are fundamental fans of PLTR, but valuation leaves little room for a normalization in growth or execution slippage," Thill wrote in a note. Bulls point to accelerating revenue, a net retention rate of 157%, and bigger deal sizes as proof the business is still gaining strength. Bears focus on tougher comparisons ahead, slowing international growth, and a stock price that already assumes years of continued outperformance.
Thill sees better risk-reward in hyperscalers like Microsoft (MSFT) and Amazon (AMZN), as well as beaten-down software stocks such as Snowflake (SNOW). RBC Capital Markets kept its own "Underperform" rating and a $90 price target, with analyst Rishi Jaluria pointing to slowing international revenue as a concern even as commercial and government segments beat expectations. Morgan Stanley's Sanjit Singh noted that Palantir has now accelerated revenue growth every quarter for three straight years, an unusual streak, especially with operating margin expanding from 25% to 60% over that stretch.
Hargreaves Lansdown analyst Matt Britzman called the quarter proof the business is in a genuine expansion phase, even while acknowledging the valuation remains lofty. Palantir's U.S. business now accounts for over 81% of total revenue and grew 115% YoY. U.S. commercial revenue accelerated to 149% growth, while U.S. government revenue climbed 90%.
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