Palantir shares fall despite first $2 billion quarter as US commercial deal growth slows

what happened

Palantir reported its first-ever quarter with more than $2 billion in revenue, nearly double the year-earlier figure, and its US commercial sales overtook US government sales for the first time. Even so, shares fell 3% in after-hours trading on Monday. According to Dow Jones Newswires, analysts pointed to a slowdown in US commercial total contract value, which rose 11% from a year earlier after 153% growth in the second quarter.

Ryan Lee of Direxion said the stock had come into earnings priced for perfection. Free cash flow reached $1.216 billion on an adjusted basis, a 53% margin, compared with $540 million a year earlier.

why it matters

Palantir shares are up 45% this year but remain 16% below their October peak of $212.94. Investors are scrutinizing high-growth software names closely, so strong results alone do not guarantee a rally.

market impact

Palantir and AI software stocks: slower US commercial contract growth weighs on the shares despite revenue gains

• ▼Palantir shares pressure down — slower US commercial contract growth cooled demand for richly valued stock

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