Palantir reports Q1 earnings on Monday, and the numbers will be scrutinised more closely than any quarter in the company’s recent history. After a 30% year-to-date drawdown, the stock has lost roughly a third of its value since late 2025, when it briefly crossed $1 trillion in market capitalisation. The sell-off has been driven by a broader compression of AI software multiples, a short-seller’s suggestion that Anthropic is eating into Palantir’s enterprise business, and a Citi price-target cut to $210.
What happened
Until two weeks ago, Palantir was, by some measures, the best-performing large-cap software stock of the AI cycle, outpacing Salesforce, Microsoft, Oracle, and Adobe. Its US commercial revenue was, by CEO Alex Karp’s own framing, on a hyperbolic trajectory. Then a now-deleted post by short-seller Michael Burry suggested that Anthropic was “eating Palantir’s lunch” in enterprise AI. The post landed at a sensitive moment: Anthropic had recently launched a marketplace through which enterprise customers can purchase third-party Claude-powered software, a move that, in some readings, threatened the middleware layer where Palantir’s Foundry and AIP have built their commercial moat. Citi cut its Palantir price target to $210 the same week, describing the move as a recognition that AI software multiples were finally compressing from levels that had been hard to defend on conventional metrics.
The numbers to watch
The Street consensus is for revenue of roughly $1.54bn, up 74% year-on-year, and adjusted earnings per share of $0.28, more than double the same quarter a year earlier. US commercial revenue is expected at around $772m, up 94%. Government revenue is expected at around $764m, up 57%. Full-year guidance, currently $7.18bn–$7.20bn, has been a closely watched anchor; any meaningful raise would, in the analyst view, partially neutralise the multiple-compression story. Options markets are pricing roughly a 10.5% post-earnings move.
The structural argument
Palantir’s government franchise remains its strongest anchor. The Pentagon’s Maven Smart System, in which Palantir is the primary integrator, was directed earlier this year to be designated a formal programme of record, locking in long-term funding across all military branches by September 2026. The company also holds an Army enterprise agreement worth up to $10bn over a decade. Neither of those revenue streams is sensitive in the short term to whether Anthropic launches another marketplace. They are, however, also not the part of the business that justifies a forward price