PALANTIR STOCK FALLS DESPITE RECORD RESULTS
In Q3 2025, Palantir reported revenue of $1.181 billion (approx. ₹9,850 crore), up 63% year-over-year, beating Wall Street’s $1.09 billion estimate. Adjusted EPS came in at $0.21 (+110%), while GAAP profit surged 231% to $476 million (about ₹3,970 crore). Free cash flow jumped 46% to $540 million (₹4,500 crore). The company holds $6.4 billion (₹53,400 crore) in cash and carries zero debt. U.S. commercial revenue was up an eye-popping 121%. The firm also raised guidance again — Q4 revenue is expected at $1.33 billion (vs. $1.19 billion estimated), and full-year 2025 revenue between $4.396–4.400 billion (+53%). Despite those stellar results, PLTR fell 7.2% in Tuesday trading, closing near $192 after hitting an intraday low of $185. Year-to-date, the stock remains up 156%, with a market cap of roughly $450 billion (₹37 lakh crore). For Indian investors tracking the global AI revolution, Palantir’s story shows that even great numbers can’t always beat inflated expectations.
Why did the market react negatively?
Markets are emotional — not always logical. Even though Palantir smashed expectations, investor optimism was already sky-high. The stock was trading at 229× forward free cash flow and more than 200× forward earnings. With valuations that stretched, even perfection couldn’t please Wall Street.
Overvaluation and profit booking
Ahead of earnings, Palantir was one of the most expensive tech names globally. For traders, the 150%+ rally in 2025 had already priced in perfection. So, once earnings landed, short-term players booked profits — a classic “sell the news” move familiar to anyone who has watched Indian midcaps correct after strong results.
Global AI sector jitters
On the same day, the Nasdaq fell 2% as investors fretted over an “AI bubble.” High-valuation names across the sector sold off — and Palantir, seen as a symbol of the AI trade, was hit hardest. Similar to how Indian IT majors like Infosys or TCS can pull back after stellar quarters when valuations overheat, Palantir faced the same fate on Wall Street.
The Michael Burry shockwave
A 13F filing revealed that Michael Burry — the investor from The Big Short — had massive put options on Palantir ($912 million) and Nvidia ($187 million), making up 80% of his portfolio. Although those were 45-day-old data and possibly hedged, headlines screamed “Big Short 2.0,” sparking nervous selling across AI stocks.
Valuation >200× forward earnings
Nasdaq fell 2% amid AI fears
Michael Burry’s puts spooked traders
Algorithmic selling amplified the drop
Profit booking after 150% YTD rally
So, this wasn’t a fundamental miss — just valuation gravity meeting investor psychology, something Indian markets know well.
Strong fundamentals and raised outlook
Despite the sell-off, Palantir remains a financial powerhouse. It’s one of the few AI-first software companies globally that’s both growing fast and solidly profitable — much like an early Infosys meets Nvidia hybrid in the data intelligence space.
Explosive U.S. commercial growth
Commercial revenue in the U.S. grew 121%, showing strong adoption of Palantir’s AIP (Artificial Intelligence Platform) by private companies. The platform is now used in healthcare, defense, and energy — areas where India too is exploring AI deployments through initiatives like Digital India and BharatNet.
A fortress balance sheet
With $6.4 billion in cash and no debt, Palantir has the firepower to expand aggressively. In rupees, that’s about ₹53,000 crore sitting in the bank — enough liquidity to weather global rate hikes or invest heavily in R&D.
Guidance raised — again
Management raised revenue guidance for the fourth consecutive time: Q4 revenue expected at $1.33 billion (₹11,100 crore) and 2025 free cash flow projected between $1.9–2.1 billion (₹15,900–₹17,600 crore). That’s a signal of confidence rarely seen in the AI sector.
Revenue: +63%
EPS: +110%
GAAP Profit: +231%
Free Cash Flow: +46%
Cash: $6.4B
Debt: 0
Few companies globally match that growth-profit combo. For Indian investors used to tracking IT bellwethers, Palantir looks like the AI equivalent of TCS in its early years — scaling fast, profitable, and sitting on huge cash reserves.
Opportunity for long-term investors?
For short-term traders, the drop stings. But for long-term believers in AI, this correction may be a blessing in disguise. The fundamentals are accelerating, and the AI megatrend is still early innings — something Indian investors have seen before in tech cycles.
AIP: The compounding engine
Palantir’s AIP platform is becoming mission-critical for enterprises aiming to embed AI into their daily workflows. Like Infosys’ ERP revolution in the 2000s, Palantir is building the backbone of the AI economy in the 2020s.
Technical support and valuation context
The $185–190 zone (₹15,400–₹15,800) remains a strong technical support area. With a recent high of $207 (₹17,200), this pullback appears more like a healthy correction than a trend reversal. Long-term investors who “buy the dip” below ₹15,500 have consistently seen gains in 2025.
+156% YTD rally before correction
AI adoption still in early stages
Debt-free, cash-rich balance sheet
Rising global enterprise demand
Strong support around $190 (₹15,800)
For Indian investors betting on the AI wave, Palantir remains a name to watch. Like Infosys in the 2000s or HDFC Bank in the 2010s, it represents a compounding story — where short-term volatility is just noise in a long-term uptrend.
