Palantir Technologies is set to report its fourth-quarter earnings after the market close on Monday, with investors closely watching whether the company’s strong commercial growth can ease rising concerns around customer retention and the outlook for government contracts.
Wall Street expects Palantir to post earnings of $0.23 per share on revenue of $1.32 billion, reflecting quarter-over-quarter increases of 9.4% in earnings and 11.9% in revenue. Earnings estimates have edged slightly higher over the past two months, while revenue forecasts have remained largely unchanged, signaling cautious optimism ahead of the release.
Sentiment around the stock remains mixed. Of the 27 analysts covering Palantir, the consensus rating is neutral, with an average price target of $189.84, implying roughly 30% upside from current levels. Recent analyst actions highlight the divide: Citi upgraded the stock to Buy with a $235 target in mid-January, while RBC Capital reiterated a Sell rating and a sharply lower $50 price target later in the month.
What investors are watching
A key focus will be the durability of Palantir’s commercial momentum. Growth in the U.S. commercial segment has been fueled by the company’s Artificial Intelligence Platform (AIP), but some analysts remain cautious. RBC Capital analyst Rishi Jaluria has pointed to recent channel checks suggesting that certain customers may be reassessing or scaling back their use of Palantir’s software. This has raised questions over whether the recent surge reflects long-term adoption or early experimentation that may not translate into sustained contracts.
The trajectory of government revenue is another major point of scrutiny. While Palantir recently secured a $10 billion, 10-year contract with the U.S. Army, RBC’s government spending tracker indicates potential weakness in qualified contract value and net new annual contract value. Investors will look for management commentary on the federal pipeline and whether geopolitical developments could help offset any slowdown in new government deals.
Valuation remains a sensitive issue. Trading at a forward price-to-earnings ratio near 188, Palantir carries one of the highest multiples in the enterprise software sector. Bulls, including Truist Securities, argue that Palantir is a best-in-class AI company with operating margins above 50%. However, any signs of slowing growth or cautious forward guidance could weigh heavily on the stock.
In its previous earnings report on November 3, Palantir delivered a strong beat, posting EPS of $0.21 versus expectations of $0.17 and revenue of $1.18 billion versus $1.09 billion expected. The stock surged 138% in 2025, but has since fallen more than 20% from its November highs, reflecting broader market rotation and growing skepticism over whether its premium valuation can hold.
Monday’s earnings report is likely to be pivotal, helping investors determine whether Palantir’s AI-driven growth represents a lasting transformation in enterprise software or whether early enthusiasm is giving way to more cautious adoption amid ongoing economic uncertainty.
