$PLTR · Everything Money · 2026-10-26

Earlier this month, Palantir recorded its highest level ever. Then, by the end of that same week, its stock price had fallen by more than 10%, in what is known on Wall Street as a correction.

So, if you own this stock, you might be wondering what's going on . Okay, here's the surprising part. While the stock price fluctuated up and down, the company achieved growth in its sales. Are you ready? 93% during the past year.

This is a stark contrast between revenue growth and stock performance over the past few weeks. What this means is that the stock and the company are moving in completely different directions.

With the earnings announcement date of November 2nd approaching, the pressure is mounting. Is this a golden opportunity to buy a fast-growing company at a discounted price, or is it a warning sign about valuation?

Palantir is a software company that helps large organizations and governments use their data and artificial intelligence technologies to make effective decisions.

In 2026, her business experienced significant growth. But the irony is that the share price was extremely volatile. On October 12, the stock hit an all-time high near $213, then fell by Friday to around $186 per share.

Even more strangely, throughout 2026, the stock rose by only about 5%, while the market as a whole rose by about 12%. That is, the stock has remained remarkably volatile this year.

However, the company's performance was the complete opposite. In the last quarter, its annual revenue grew by an astonishing 93%. Its business in the United States, i.e., selling its products to American companies, also saw tremendous growth of 149%.

Its business with the US government grew by 90%. This is the most important idea in this video: Stock price and company performance do not always move in one direction. They are now telling two completely different stories.

So why did the stock price drop ? Well, guys, that's a valuable lesson. Much of the decline occurred in a week in which the entire technology market retreated due to concerns about AI spending and interest rates. So, it wasn't just about Palantir.

Just before the decline, Goldman Sachs raised its recommendation for the stock to "buy," and Barclays Bank initiated coverage with a target price of $265.

So, folks, you have a company that's experiencing extremely rapid growth, and analysts are increasingly optimistic, and then the stock price drops at the same time.

So, let me explain to you how powerful Palantir's basic figures are , because they are extremely rare. Balantir doesn't just grow fast. It is a very profitable company. In the last quarter, 47 % of every dollar earned was converted into operating profit.

It also generated cash flows exceeding $1.2 billion in a single quarter, which is the actual amount of cash entering the company. In addition, the company has approximately $9 billion in its bank account.

Most companies that grow at this rate incur heavy losses, while Palantir makes huge profits.

But here's the statistic that paints the whole picture : its current customers spent 57% more than they did just one year ago . In other words, once any company starts using Palantir, it will increase its use of it significantly over time.

Furthermore, the volume of future business that has been signed but not yet executed has doubled. Therefore, demand is not just strong today . There is a huge amount of work waiting for us tomorrow.

Now, here are some figures that demonstrate the strength of the company. Its "rule of forty" ratio achieved an almost unprecedented level of 155%.

Here, the growth is 93% plus a profit margin of 62%. This is Palantir's adjusted figure, which does not include the shares it pays to employees. A 40% figure alone is considered excellent. As for this company, it reached 155%.

It now serves more than a thousand customers, an increase of approximately 24% in a year, and nearly 80% of its sales come from the United States. Okay, so what should we expect on earnings announcement day , November 2nd?

For this quarter, management provided itself with a forecast, that is, it projected revenues of approximately $2.16 billion. But Wall Street analysts are expecting slightly more , around $2.18 billion .

This difference constitutes a classic trap. If Palantir reports revenue of $2.17 billion, it will technically exceed its own expectations , but will still fall short of what Wall Street anticipates.

With such high demand for the stock, this slight difference may disappoint investors and lead to a collapse in the stock price. But frankly, the revenue figure may not be the most important factor.

What many will be focusing on is whether the administration will raise its full-year forecast again, as it has done twice this year, increasing its 2026 target from about $7.2 billion to more than $8.1 billion .

This type of frequent uplift is what really excites investors. Here are their projections: By combining the revenues of the first three quarters, approximately $1.63 billion, $1.94 billion, and then $2.16 billion, we get $5.73 billion.

Therefore, to reach $8.15 billion for the year, the last quarter must generate approximately $2.42 billion . That would represent an increase of approximately 72% compared to the same quarter last year.

Therefore, they are quietly expecting to achieve another strong year-end result, surpassing last year's figures. So, the real question on November 2nd is: Will confidence continue to rise or will it finally decline?

Quick note: Management has already warned that profit margins may decline slightly this quarter due to seasonal hiring, which means hiring a large number of new employees at this time of year.

Therefore, this slight decrease is not necessarily a negative indicator.

Therefore, on November 2nd, I want you to watch four things: any change in the full-year outlook , US commercial sales growth , new deals signed, and profit margins. These four things will tell you much more information than the main number.

Let's now look at the positive aspects. Why was the company able to achieve such remarkable success, focusing solely on the company itself, and not on the share price? Palantir may become the primary operating system for artificial intelligence within large companies.

It doesn't just offer a chatbot; it integrates artificial intelligence directly into the company's real-world operations and decisions.

Once a company bases its day-to-day operations on this system , it becomes extremely difficult and costly to abandon it. It is a very strong competitive advantage, just like the water surrounding the castle that protects it from competitors.

They call the key components the AIP and the ontology, which is a live digital map of how the company actually works.

Secondly , its commercial sector is experiencing tremendous growth with a jump of 149%, and customers continue to spend more money after signing their first project . Third, its work in the government and defense sectors is characterized by depth and interconnectedness, making it difficult for competitors to win it due to the importance of security and trust.

Fourth, the company maintains its neutrality in the AI wars. This technology allows customers to use any AI model they want while maintaining complete control over their data , which is what large organizations crave.

The company recently collaborated on a new project called Regna AI to help clients build their own artificial intelligence systems, in a smart move that exploits the sovereignty trend, i.e., the desire of countries and companies to have complete control over their data and their artificial intelligence systems.

Finally, it still has ample room for growth abroad. Its international business is growing much more slowly than in the United States, which could represent a huge untapped opportunity if it manages to crack the code to success abroad.

However, this code requires trust, because many international companies and countries are concerned that Palantir’s presence in the United States represents a conflict of interest, and this may form part of their negative arguments.

Firstly, the competition is much fiercer than people imagine; it is actually enormous. Companies like Microsoft, Amazon, Google, and others all offer their own ways of building data and artificial intelligence tools.

Some large companies have simply decided to build their own systems internally. Secondly, Palantir’s success lies in sending its outstanding engineers to work directly with customers, meaning they actually work within their business environment.

This achieves amazing results, but it is very difficult to scale up , i.e., rapid growth is difficult due to the limited number of talented engineers available.

This is a completely different challenge from software, which can simply be copied and distributed again and again.

Third, 80% of its revenue comes from the United States . Therefore , any slowdown in US government or business spending will severely affect it, although it will most likely be temporary .

But the point is that in order to justify these very high ratings, people may not be taking into account the possibility of this slowdown. There is no great margin of safety from the rest of the world.

Fourth, large government contracts always involve risks. Budgets change, deals are delayed or canceled, and things get complicated by politics , not to mention the slow pace of procedures.

A recent example of this is that the British government is considering alternatives to Palantir for some sensitive work. Fifth, it is almost certain that the astonishing 57% additional spending from current customers will not remain high forever.

As the size of the accounts grows, it becomes difficult to continue expanding them at the same rapid pace.

First, one should be wary of Palantir's mega-dealing headline. The company itself says that these figures assume customers renew their subscriptions and do not cancel them. Therefore, a large number of bookings does not necessarily mean guaranteed future revenue.

Secondly, Palantir pays its employees a large amount of stock, exceeding $260 million in the last quarter alone. Although this percentage decreases from revenues, it represents a real cost to shareholders that many are unaware of.

Therefore, we must always look at the real profit behind it , i.e., the cash flow after deducting equity-based compensation. Another interesting point is that a small portion of the profit reported in the last quarter came from a one-time gain from its investment in SpaceX.

This is good, but it is not a recurring investment gain, so we cannot rely on it.

The same applies to the other side. If the value of SpaceX's investment suddenly drops , that is no reason to punish the company. Therefore, we will not give the company more gains than it deserves, and we will not overreact if there is a temporary decrease in the value of one of its investments.

You may have seen in the headlines that CEO Alex Karp sold approximately $86 million worth of shares in August. It sounds scary, does n't it? But upon closer examination, we find that the sale was to cover taxes on shares granted to him under a pre-scheduled routine plan .

So, this was not a pre-earnings panic sell-off by Karp , but simply a routine, procedural way of rewarding executives.

So, this is the real debate. There is no doubt that Palantir is an exceptional company. Its growth, profits, and cash flow are top-notch. The whole question revolves around one point: price versus value.

Even after this 10% drop, Palantir remains one of the most expensive stocks on the market, meaning you have to spend huge sums to earn every extra dollar in profit.

Today, investors are paying a heavy price for years of spectacular growth that has yet to materialize, and which is supposed to happen without any obstacles or impediments. When did that happen before? This is the danger.

When a stock is priced on the basis of perfection, meaning the price assumes that everything is going well, even great earnings may disappoint if they are not absolutely perfect.

So, the question is not: Is Palantir a great company? The question is: Is it a great investment at this price? These are two completely different questions. A great company bought at a very high price may turn out to be a failed investment. This is the essence of value-based investing.

Let's take a look at the numbers. This is Palantir, and its stock price has risen to 195. Remember, this is not the company's price, but its market capitalization of $500 billion.

This means that if you bought all the outstanding shares at market price, you would pay $500 billion to own them all, if that were theoretically possible.

The next step is to look at the value of the organization. It is rare for a company to be worth less than its market value, which means they have more cash than debt. This is an excellent balance sheet.

It is very difficult for a company that has more cash than debt to go bankrupt.

Now, look at how much the return on capital has increased. The average return over 5 years was 8%, while the average return over one year was 33%. This is more of a quality indicator than a quantitative one; it indicates the quality of the company and its ability to generate good returns on invested funds , and this is an excellent indicator for the company.

The profit margin over 5 years is 22.7%, while it is 49% over one year. I'm not worried about that; it's a relatively new company that has just become profitable.

What worries me most is the price-to-free cash flow ratio of 150, and the price-to-earnings ratio of 166. True, if the company can significantly increase its earnings, then the situation may be good.

But folks, if we look at history, it's very rare for a company that sells at these rates to turn out to be a great investment, unless we're in the midst of a strong bull market where the company is also improving. Apart from that, it is extremely difficult.

Okay, let's take a look, and by the way, members of our community are investing in this company. Let's review its performance over the past eight quarters. The prices of many stocks rose by 25%.

But what do you expect? The company's performance is much better than it was five years ago. It is true that the shares rose by 25 %, but I understand the viewpoint that says: "The stock is expensive.

Let's distribute it to investors and get liquidity, as the company is in a much better position." I understand that.

Secondly, there is no need to worry about the return on capital because it is calculated over five years, and the first year's return is clearly an amazing 33%. And of course, we have the price-to- earnings (PE) ratio and the five-year free cash flow ratio.

Even if the return is over only one year, it remains an indicator. The question is: Will the company reach this value before the share price drops?

Most importantly, this document contains a complete analysis of Palantir, which is precisely what we are doing here.

I highly recommend downloading the PDF file from the link below if you are serious about Palantir and investing. Look at this: Earning $1.60 per share this year , and expected to grow to $14.38 over the next four years.

It is true that the number of analysts is not large, but this is tremendous growth.

Look at this: at $14.38, if we apply a price-to- earnings ratio of 22 to this company, we are talking about a share price of $300. The share price is currently $195. This is an increase of over 50% within four years.

This may seem boring to some because it represents only 12% annually. But again, there are many assumptions that this company was built on and that may have been taken into account when determining the current share price.

Now we move on to revenue growth. $8.2 billion will grow to $70 billion. This means an 8.5-fold increase over the next four years . Revenue growth of 88%, 50% , 46%, 85%, and 100%.

Oh, my God! This is madness! Insane in every sense of the word.

Now, I have some reservations, as the company's market value is currently $500 billion. Software companies typically experience revenue growth of 7 to 10 times. If the company generates $70 billion in revenue, and even if we assume it has grown 12 times, its market value would be $840-880 billion .

All I did was apply a multiplier of 12 times to this number. Guys , the current market value is $500 billion. So, there is still room for growth, but not at 30%, 40%, or 50% per year as everyone expects. You must remember that.

Okay guys, here we are now in front of a stock analyst from Palantir. Here we sit and define the assumptions we will adopt for the next ten years, and what their value is to us.

I will conduct my analysis for the next ten years. First, the growth rate. 25%, 35%, and 50% . Guys, you've raised the ratio to a higher level than I personally expected. You might say, "Paul, that's low."

Guys, that's a 35% increase in revenue. The company's total revenue will reach $160 billion in the next ten years. Its current revenue is $8 billion. That's 20 times the revenue.

This is not a simple number. I am not comfortable with this , but I want to present it here as an example.

Second, the profit margin. I have identified 40%, 47.5%, and 55%. Guys, I'm comfortable with these ratios. I think that even if sales slow down, they will be able to maintain their profit margin.

I might lower it a little based on the average assumption, but I'll keep the higher assumption at 55. I lowered the average to 45.

Now, what price-to-earnings ratio would I assign to this company after 10 years? Guys, this is the most common question I get asked about stock analysts. Paul, what is a suitable price-to-earnings ratio?

Don't look at the company's history. What you need to look at is the history of the Standard & Poor's 500 index. The Standard & Poor's 500 index has averaged 15 to 17 over a long period of time.

Your next question should be: Is this company better than the average company in the Standard & Poor's 500 index? Well, it has very high profit margins, a strong competitive advantage, and very high capital returns that are constantly improving.

So, for me, this is a better quality company. How much better is it? Instead of 15 to 17, I put 18, 22 and 26.

Remember, guys, most of the company's growth will happen at the end of ten years. So, if you say to me, "Well, Paul, the growth will be tremendous," but at the end of ten years, you need to look beyond that.

Ten years from now, what is a suitable price-to-earnings ratio for the company? I could say it's less than 22, but I kept 22 here.

What is the expected return? Guys, in all our videos, I usually set a return of 9.5% . This is not the return I actually want, but rather the return I put into these videos to show the intrinsic value.

What is the company's value today? It's not the price I want to pay, nor the price I would pay for it. Because, remember, you need a safety margin. I strongly encourage you all to enter a number higher than 9.5%.

Now, folks, you just saw me using Palantir's numbers, entering my own assumptions, and seeing the return I would get at today's price. It only took a few minutes, and I spent half of that time explaining things to you.

But let me ask you a question. On November 2nd, Palantir will announce its results. Expectations may change , and the growth rate may change. A stock like this could rise by 10 or 20% in one night.

If that happens, which it inevitably will, can you do what I just did? Can you enter the new figures and find out within minutes whether the price still makes sense or not, or whether you should even invest your time in the company?

Or will you remain stuck reading headlines and guessing?

Speculating on a stock, especially an exciting and expensive one like this, can be very costly and quickly. Let's assume you have $10,000 in Palantir stock. If you pay a hefty sum, and the stock price drops to its intrinsic value, i.e., by 30%, you will lose $3,000 just like that.

So, what do you have to lose if you don't know the right price? What if the price of a stock drops and becomes a golden investment opportunity , but you are still preoccupied with the news and do not realize that it is an opportunity not to be missed? What will you lose if you don't buy this stock?

That is precisely why we developed the stock analysis tool. We did not design it to criticize companies, but to understand the relationship between price and value. This is the tool that I have used more than 4,100 times, and it is the one I am using now.

Simply enter your assumptions, such as revenue growth, profit margin, price-to-earnings ratio , and desired return, and the tool will tell you the return you will get at today's price , and the price you have to pay to achieve that return.

Now, guys, I'm going to do two analyses here. I will analyze a return of 9.5%, and then I will analyze my personal return. Based on the 9.5% ratio and what I considered to be high assumptions, I set a lower price of 82, a higher price of 875, and an average price of 225.

Now, before everyone gets excited because I heard murmurs of admiration in the background, remember that I made assumptions that I considered to be bold, and this does not take into account any additional dilution resulting from equity compensation.

Therefore, I assume the number of outstanding shares will remain the same. The return will remain 11%. Guys, for me, for a company with this kind of volatility, does this really make it worthwhile?

If you pay today's price and my average assumptions are correct, you will get about 11%.

As Tim just interrupted me, he said, "Paul, this is the first time I've seen Palantir's stock rise below average in a long time." And I would like to remind everyone that we do not know the future.

If someone suddenly learned that Palantir would double its profits annually over the next ten years, this is the cheapest price you'll see for Palantir stock in a long time. Seize the opportunity.

I don't advise you to do that, but that's the assumption I'm making . If they told you, "Paul, their revenues and profits won't increase over the next twenty years," would you pay that price?

Of course not. This is the basic idea. The issue is about making logical assumptions.

You might think I'm very reserved , and maybe I am. I will miss out on promising investment opportunities. But people also don't remember those stocks that I said, "These don't make sense," which have since dropped in value to almost zero.

So, yes , you may find stocks that generate huge profits, and these stocks may be worth considering. It's best if the value of too many stocks doesn't drop to zero.

As for me, my personal return requirement is 15%. Guys , don't copy me on this. I am very lucky financially. I own a thousand apartments, and I have several companies. I don't need to make huge profits.

I rely on a mid-cost dollar strategy with low-cost exchange-traded funds like SCHD , and I invest a portion of my money in individual stocks. Therefore, in order to buy a stock, I want a return of 15%.

Based on these assumptions, I need to see Palantir's stock price around $140 or less. Frankly, I am not comfortable with these assumptions. So, you may see me as reserved, but that is my position.