$PLTR · Tom Nash · 2026-11-02

Palantir is about to shock the world, but not in the way you think. Currently, this company is down 11% in the last 12 months , which is surprising when you think about it, because we've seen a lot of improvement in the fundamentals of this business over the past few years, the past year, and the past 6 months.

The company is growing at a great pace, yet the stock is down 11% in the last 12 months.

So, let's start by looking at what Palantir has done so far. They definitely deserve an A+. Net dollar retention is 157, which is the highest in the stock market.

We have a revenue of $4.5 billion in 2025. 6.2 billion has already been made in the last 12 months and it will be much more by the end of the year. Revenue growth of 93% year-over-year, operating growth of 240% and cash growth of 57%.

These are monopoly numbers, friends, and in the case of Palantir, they are real. At the same time, the stock has fallen 11% in the last 12 months.

And since last year, this company's forward price to earnings has actually dropped from 76 to 53. This has decreased dramatically as these numbers have become a reality. Business is improving, there's no doubt about it , and prices are getting cheaper, there's no doubt about that either.

Now you can debate with me whether the company was already overvalued and therefore deserved it , but that's a topic we can discuss later. Palantir has done very well in the last 12 months.

The price has become much cheaper. This is a realistic statement. This is not an opinion.

Palantir's current guidance for this quarter is $8.15 billion for the full year 2026. Now, the expected number for this quarter is 2.18 billion, which is much higher.

Undoubtedly, market expectations are very, very high this quarter. So, even if we do well and they give good guidance and everything goes great, there is still no guarantee that the share price will go up in the short term.

In fact, there's a good chance that even if Palantir does well, we could see minus five, ten, or fifteen percent.

The only way for stock prices to rise immediately after earnings in the short term—I'm not talking long term , I'm talking short term. The only way this income will cause a short-term jump in share prices is if we do these things. We need three wins in all areas.

Of course, we need to improve the guidelines and do better than the guidelines. Second, we need to go beyond consensus. And third, we need to accelerate growth. Only if Palantir can achieve these three— guidance, consensus, and acceleration—will we see a post-earnings share price increase, as the share price is currently determined based on absolute performance.

Anything less than perfect means that the market will correct. This is how the stock market works. When you're heading into an earnings report with high expectations , you must deliver.

If you cannot meet conditions one, two, and three, the stock price will fall in the short term. This is a realistic statement.

Currently, the guidance for this quarter is 2.164 billion and the revenue growth rate is 83%. This is the official guideline for this quarter. We will fulfill it. Like every quarter, this too has been cautiously understated.

Palantir gives guidelines that they know they can easily overcome. That number will definitely be exceeded. I have no doubt about this. And it's put in place so they can come and say, "Guys, we did better than the guidelines."

This is not enough. We also need to go beyond consensus.

Now, the current consensus is 2.18 billion and earnings per share of $0.41 for this quarter. That too must be overcome. In addition, no matter how good their revenue growth is , it must be higher than the previous quarter.

The annual growth rate in the previous quarter was 93%. We need to get 94% or higher, okay ? To achieve Palantir's triple bit.

In my dictionary, triple beat basically means guidance, consensus, and acceleration. If you can exceed all three of these, the share price will increase. The only way to positively surprise the market is to deliver incredible results.

And yes, I understand that all of this is unbelievable.

What does this mean in real numbers? This means that revenue should be $2.28 billion this quarter. That's the number you're looking for. 2.28, which is much higher than the guidance, much higher than the consensus.

They must perform very well for short-term gains.

It's very difficult to increase share prices when everyone expects a win before an earnings report. This is a burden to be one of the best and fundamentally strong companies in the world.

Now, acceleration is the main story of Palantir. This acceleration in income has to happen, because that's what the whole point is. We want to show that Palantir is not slowing down, but rather their revenue growth is accelerating.

Now, it's much harder to do this as a percentage when the company gets bigger. Everyone knows this. Look at Nvidia or other companies. It is really very difficult to maintain acceleration.

Palantir is currently priced perfectly , right? And for the share price to rise, they need to accelerate against this income. This is just a factual statement. But for long-term investors like you and me, this doesn't matter much.

Whether it happens or not, it does n't really matter. In the words of one of the best, perhaps the best of all time , who literally wrote the book, "The stock market is a voting machine in the short term.

That's its job. "But in the long run, the stock market is a weighing machine." So, whether it happens or not, whether they have this acceleration or all the shiny achievements, it does n't matter.

If they improve and continue to improve over the long term, it's a weighing machine. The stock market will determine their price accordingly. So, do n't worry about it at all. Rest assured. Everything will be okay.

Now, let's talk about the second quarter of 2026. Let's evaluate that threshold , because there were some great numbers there. We are looking at 1.93 billion in revenue, which indicates 93% growth.

We are seeing US trade growth of 149%. We are seeing an operating margin of 62%. Which has increased from 46. We are seeing free cash flow of 63%. And 9.5 billion in cash versus zero debt.

The Rule of 40 is 156, which is incredible, and revenue is growing three times faster than operating expenses. Operating expenses increased by 34% against a 93% revenue growth.

Again , it is unthinkable for a company of this size that revenue is growing so much faster than operating expenses. The rule of 40 is 156. And the forward PE is falling and the stock is 11% cheaper than the last 12 months, even though it is growing at a rate of 93%.

Naturally, these are incredible numbers. Without a doubt, they deserve an A+ for last quarter. There is no doubt about it.

We ran Stock MVP on Palantir and we were really surprised because Palantir scored 98 out of 100 on Stock MVP. This is literally our highest score ever on a stock MVP and it's not a gimmick.

I ca n't influence these scores. This is hardcoded into the way this scorecard works. So, I have no hand in it. If you see growth, you've got all the points ; Margin, all points; Liquidity, all points; Balance sheet, all points; Scalability, all points.

They only lost two points because their institutional holdings were 2% below what was needed to get the full 100 points , which is truly ridiculous. This is as close to a perfect company as it is possible to get.

And this is not me saying this, this is literally the data on the stock MVP scorecard.

However, no company is perfect. There are definitely some things that need to be improved, and Palantir is no exception. In my opinion , the one thing they need to work on the most is client concentration.

Palantir has a large number of clients who are locked into huge contracts. As a result, if a client leaves, the impact on income is severe. Now, the chances of any of their major core clients leaving are almost zero.

But theoretically speaking, you do n't want clients to be so concentrated that each client becomes too influential on you. You'll want to spread them out as much as possible. So, they need more and bigger clients to reduce this density.

Another thing is that their presence in the international market is almost non-existent. In fact , more than 85 percent of their total revenue comes from the United States alone.

We need a greater presence in Europe. As hard as it may sound, and it really is, as stubborn as the Europeans are, and they really are , Palantir must enter the international market, especially the European market, which they have not been able to do so far.

Another thing I want to mention and it's improving, okay? We're down from 16% , but that's still too high. 13.7 percent of total revenue went to share-based compensation. Now, I'm for it.

I think it's great. I'm not against share-based compensation, but I think at some point this number should come down to single digits. This is another thing they need to improve.

But I'll say it now , if these are my only problems with this company , then I'm really picking a fight. These are the only issues I have with Palantir that will remain forever. I'm buying it right now.

This is what I am observing in terms of income and it is very important. I want you to pay attention. First, US commercial income. I want it to be 950 million , okay? It is very important to achieve this with a target of 3.6 billion for the whole year.

This would show me that commercial revenue growth is at the pace where Palantir needs to be to make that big leap.

The other issue is the target of 2.5 billion for the fourth quarter. Basically, Palantir has to come out and say, "Look, next quarter we're going to make $2.5 billion per quarter."

This is also very important, in terms of total income.

And three other things that I'm observing are the total value of US commercial contracts at 2.13 billion. It has to grow. The remaining contract value is 6.24 billion. This too must increase.

And net dollar retention, while it may sound harsh to say it's at 157 , needs to be increased as well. And obviously , I want the Rule of 40 to increase as well.

About a couple of years ago, in 2023, I made this post on X. At the time of posting, the share price was $18.89. And what I said was, "Palantia is really amazing, you know? The skeptics are slowly changing their minds, but not fast enough.

This stock, even after falling 11% in the past year, is now worth 10 times what it was when I posted it in 2023. So, when I was building my model and showing people that my target price was $500 a share, people called me crazy. I told them, "Hey, you ain't seen nothing yet."

My bullish prediction is that my bull case, or optimistic estimate, of $500, has now actually become my bear case. And I'll go into more detail on that in the next few slides. But before that, how did I arrive at this number?

Why did 500 suddenly become my bear case? Basically, it means that I don't think Palantir's share price will ever go below $500. That's the floor for Palantir.

Why? Well, the numbers are on the screen. You can look at them. You can check them. You can build your own models . But basically, I'm assuming that the revenue growth rate will continue to decline over the next few years.

It's going to continue to go from 90 , 85, 80, and so on. I'm assuming a 38% net margin and a 35 PE , and that gives me a price per share of $495, That's a 170% increase from today.

My bare case, or the lowest possible scenario, is a 170% gain on Palantir over the next few years.

Now, I want to show you my base case. This is the medium case. In my medium case, I assume the same revenue growth rate declines—95, 90 , 85, 80, just like the previous model, but the net margin increases to 42%, and I assume the market is willing to pay up to 45 PE for this company.

At 45 PE, that's a $717 stock, and a 290% gain in just a few years, in a company that many experts say is already overbought. I see that as a huge possibility.

Of course, I also have a bull case , and this is my new bull case. My new bull case assumes the same revenue growth trend with a 46% net margin and a 55 PE in 2030. That would give us a target price of $978.

So, basically, for Palantir My new price target is $1,000, which is 431% higher than it is now, and I think we'll get much closer to that after this earnings release . Whether it drives the stock price up or down immediately, it doesn't matter. What I want to see is improvement.

As we start watching these earnings reports today, the number one thing I want you to do is not buy or sell the stock during the earnings release . Absolutely not. Never, never, never.

Leave the stock as it is. Number two, I want you to stick to your position, whether it's DCA, doubling or continuing to DCA normally. In this earnings release, I want you to focus strictly on one thing, and that's the business and its fundamentals.

Don't refresh the stock price every moment to see how the stock price is changing due to earnings . That's actually detrimental to your long-term investment mindset. Let's just listen to the earnings report, follow the numbers and watch the business.

And how it's doing in terms of the fundamentals.