Palantir Hikes Sales Forecasts After Record Stock Run-Up

Palantir Technologies raised its annual revenue outlook to $4.4 billion and outpaced analyst estimates for third-quarter sales, citing “accelerating and otherworldly” growth for its artificial intelligence and data analytics products. Palantir shares gained as much as 7% in after-hours trading following the report, before giving up most of those gains. Investors had high expectations for the company and had sent shares up more than 150% thus far this year. The stock was priced at 85-times sales expected over the next 12 months, as of Friday, making it by far the most expensive in the S&P 500 Index. Revenue increased 63% to $1.18 billion in the period ended in September, the company said Monday in a statement. Analysts, on average, estimated $1.09 billion. In the current quarter, sales will be about $1.33 billion, compared with an average projection of $1.19 billion. Bloomberg Businessweek Senior Reporter Max Chafkin joins Bloomberg Businessweek Daily to discuss. He speaks with Carol Massar and Tim Stenovec.

Palantir Technologies Inc. slid in early trading on concerns about the company’s lofty valuation and the sustainability of the AI rally, even after it topped analyst estimates for third-quarter sales and raised its annual revenue outlook.

Palantir shares fell as much as 8.1% in premarket US trading on Tuesday as broader stock market indices declined.

Adding to the concerns, hedge fund manager Michael Burry disclosed bearish wagers on Palantir and AI chip leader Nvidia Corp. Burry’s Scion Asset Management bought Palantir put options, which increase in value as shares decline, according to the latest 13F regulatory filing.

The stock had soared more than 170% this year through Monday, when it closed at a record. The company had a price-to-sales ratio of 85 as of Friday — the highest in the S&P 500 Index.

“All these numbers are completely disengaged from fundamentals,” D.A. Davidson’s Gil Luria said in an interview with Bloomberg Television. “This is a company with a $4 billion run rate that’s growing 63%. There’s nothing even remotely close to that, which is how we got to the situation where the valuation is at unprecedented levels.”

Mandeep Singh, senior analyst at Bloomberg Intelligence, said that investors likely wanted more guidance about the following year. Palantir gave a forecast for the current quarter, Singh said, but “I think everyone wanted some sense of 2026.”

Revenue increased 63% to $1.18 billion in the period ended in September, the company said Monday in a statement. Analysts, on average, estimated $1.09 billion. In the current quarter, sales will be about $1.33 billion, compared with an average projection of $1.19 billion.

Palantir has reported revenue above analyst estimates for 21 consecutive quarters, according to data compiled by Bloomberg.

“We are in a nosebleed zone,” Palantir Chief Executive Officer Alex Karp said in an interview Monday. “No one else is here.”

Burry, who became a household name after his bet against mortgages in the late 2000s was featured in The Big Short movie, took to X last week with a cryptic warning to retail investors about market exuberance.

“Sometimes, we see bubbles,” he wrote. “Sometimes, there is something to do about it. Sometimes, the only winning move is not to play.”

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