$PLTR · Financial Education · 2026-11-02

Palantir fell 3%.

Number two, Palantir. We will talk about Palantir. Should I buy or sell this stock now , okay?

Now, let's talk about whether you should buy or sell Palantir stock. Then we'll discuss which Palantir I should buy next and then we'll talk about a great secret stock to buy, okay?

Palantir, oh my god, look at that. That's absolutely A++ grade. This is perfect, ladies and gentlemen. Nothing could be better than this. Revenue growth increased by 96% year-on-year.

The cost of revenue has increased dramatically by 85%, I think that area includes stock-based compensation (SBC), so that's something to keep in mind. However, while that 85% number is quite impressive, it is low compared to the revenue, so it is good.

Total profit increased by 98% to 1.9 billion, compared to 973 million in the same quarter last year. I mean, the way Palantir has expanded their business model and the work Alex Karp has done with his team is legendary.

Sales and marketing increased by 44%, research and development by 52%, general and administrative expenses by 42%, and total operating expenses by 46%; These would usually be a problem because the numbers are huge, right?

These would have been problems if Palantir hadn't increased their revenue by 96%. This is incredible.

Okay, gross profit increased by 98%, how crazy is that, right? Operating income increased by 176%, interest income by 49%; They had other expenses of around $25-26 million this quarter, compared to a benefit of $27 million in the same quarter last year, so that's important to keep in mind.

Yet, despite this, earnings before income tax grew by 139%, net income by 138%, and EPS on a diluted basis by 144%. Friends, these numbers from Palantir are legendary, truly extraordinary.

Look at the balance sheet. Look at this cash and cash equivalents, which was 1.4 billion at the beginning of 2025, now it is 3.6 billion. At the end of 2025 they had 1.4 billion in cash, now they have 3.6 billion in cash and marketable securities, up from 5.7 billion at the end of last year, to almost $7 billion, right?

And total equity has increased from $7.5 billion at the end of last year to now stand at $11.3 billion. I mean, it's really incredible, right?

Palantir, this stock I bought in 2022 at a little over seven dollars, right? This stock has done much more than I could have imagined. What I thought would be the future of Palantir, it has been much more and much better.

I never thought Palantir's revenue would grow by more than 90%. And they have recorded 90% revenue growth for two consecutive quarters. Incredible, brother. I mean, when you were so optimistic about Palantir and you weren't optimistic enough, like me, that's incredible. Truly a wonderful company.

Now, having said these words, let's talk about the main problem. The share price is falling. Hmm. The share price is going down. So, you look at that and say, "Well, how?" With an A++ grading income statement, they have outperformed everyone in almost every possible area.

The balance sheet is better than ever before. It has proven to be a huge money maker, right? And if you want to keep them in the SaaS space, they are considered the only company in this space where you would want to be, at least that's what many people think, right?

So, why are share prices falling? I'll tell you why it's decreasing. It's decreasing for three different reasons, right? Listen. This is the number one problem. This is the main problem with Palantir stock, right? Not with business, but with stocks.

Listen. Palantir is a very fast-growing company. In the case of these types of companies, people love them until their growth starts to slow down. Once the growth rate starts to slow down, people get scared.

Remember, those who are new to the market, those of you who are in the first year or two, right? Slowing growth and falling income are not the same thing, right? Growth could be slowing down, "My company's revenue was growing at 25% and the next year it dropped to 15%."

That is the decline in growth. Income is still growing, just not as fast as before. Declining revenue means, "My company's revenue was growing 25% last year, and this year it's down 10% and negative."

That would be the downfall, wouldn't it? Keep this in mind. Slowing growth and decline are different things.

So, what's going to happen to Palantir, and it's probably going to last for the next two to three years, is a slowdown in revenue growth. That is, income will still continue to increase.

Income will continue to grow in the next 2 to 3 years, but the growth rate in percentage terms will be much lower than before, okay? So, if you look here, they had 63% revenue growth in the last few quarters.

Then, they increased to 70%. There was a direct increase of seven percentage points. Then, they jumped to 85%, which is 15 percentage points higher, right? Then, they got to 93%, up eight percentage points, but that's where we started to see a kind of slowdown, right?

The overall growth rate is still on the rise, but you can see that the early mathematical signs of a recession are becoming apparent, right? And in the most recent quarter, they took it to 96%.

That is, there is still growth, but it is slow. This is only three percentage points. Their next quarter forecast is in the high eighties, okay? For the next quarter. So, this is going to happen for the first time in many years in the next quarter.

For example, you have to go back to 2023. For the first time since 2023, Palantir is going to experience a slowdown in revenue growth, right? And so, this is a problem. This is a big problem.

When you're a hypergrowth company and going through a situation like that, usually a lot of investors don't want you anymore, right? So, this is a major problem.

Next, we have two small problems with Palantir, okay? Both of these are important. When you talk about hypergrowth companies, these are not as important as the first one, that's all.

That growth rate is accelerating, right? This is a small problem, but it is still very important, and the next one is also a small problem, okay? So, check it out. I always post, you know, I do a lot of income statement reviews every earnings season.

I post them in private groups. And so, in the private group Discord chat, you can just type Palantir and I'll pull up the grades from past Palantir income statements, right? And look at this.

Look at this, okay? So, this is for their reported quarter 9 months ago. A++ grade. Palantir got a lot of A++, right? Revenue expenditure increased by 24% in that quarter. Okay, remember that number, 24%.

Now, go back to the quarter I evaluated 6 months ago. Now, it stands at 25%. Not too unusual, but it's a bit of an increase. But you would say it's okay because revenue has increased from 70% to 85%.

So, there's no problem at the moment, right? Now look at what happened 3 months ago. I checked it and oh-oh, the cost of income has reached 54%. Okay. Now, you might say this is not a problem because 54% of income is spent against 93% of growth, that is not a problem.

But, look at the income and expenditure account I checked 12 months ago, okay? Revenue growth of 96%, while revenue expenditure increased by 85%. So, ladies and gentlemen, listen up, income expenditure.

It's out of control. Now, that doesn't mean it will always be out of control. They might get it under control next year, but right now, it's just going up, from 25% a few quarters ago, then a little over 50%, and now 85%.

Many are asking, will this start to outpace revenue? And that's a serious question that you have to at least consider, right? So, this is what is happening. And then problem number three, this is a small problem, but it's quite important, is this.

PE ratio. And we're looking at 1000 X stocks.com here. Look at that. This stock has a forward PE of around 100, right? You could say, if it goes down a little tomorrow and maybe the income is better, maybe it's okay, you know.

Two-year forward PE 70. So, the main thing is. Those are all right. For example, people are willing to pay any PE ratio if you have incredible growth and you continue to accelerate it.

Once you see growth slowing down, valuation becomes a big issue, right? So, next quarter, let's say their revenue growth is 89%, right? That's still a great number, but it's down from 96.

Let's say next quarter, remember they have to keep up with all these numbers and there again... I said, "I bought Palantir at $7. This is my next Palantir. When I bought Palantir at $7 in 2022, it was a stock that almost no one believed in.

If anyone did believe in this stock, they were afraid to talk about it. Only a few proud people like Amit would have spoken about it proudly and publicly, right? And clearly I discussed this stock extensively in '22 and '23.

I mean, I've been covering it for a long time, since 2022, of course, and I've been doing it regularly since then. Palantir has achieved growth rates that were beyond the expectations of many of us.

Our expectations were much lower than what they achieved.

So if I show you an example like Palantir, which was very early in its growth cycle when it went public. The thing is, they went from 48% growth to 49% growth the next quarter.

It was way back in 2021. Then they went from 35%, 34%, 30%, 25%, 21%, 17%, 17%, and finally in 2023, their growth rate dropped to 12%. You would have assumed that Palantir's revenue would only grow 10%, 15% in the coming years, right?

And so if you want to know why the stock crashed from 30 or 40 to $6 or as low as $5.98, right? It's because they went from 49% growth to 12% growth in a few years, right? Now you would have assumed, "Okay, it's going to be like this forever."

"But you know what? It wasn't, was it? It was too early to assume in Palantir's growth cycle that it was over and that this was going to be their growth rate forever. So what happened in the next few years, the growth rate went from 12% to their recent peak, right?

96% revenue growth, right? The thing is, they went from 48% growth to 49% growth the next quarter. It It was way back in 2021. Then they went from 35%, 34%, 30%, 25%, 21%, 17%, 17%, and finally in 2023, their growth rate dropped to 12%.

You would have assumed that Palantir's revenue would only grow 10%, 15% in the coming years, right? And so if you want to know why the stock crashed from 30 or 40 to $6 or as low as $5.98 , right?

It's because they went from 49% growth to 12% growth in a few years , right? Now you would have assumed , "Okay, it's going to be like this forever." "But you know what? It wasn't, was it?

It was too early to assume in Palantir's growth cycle that it was over and that this was going to be their growth rate forever. So what happened in the next few years, the growth rate went from 12% to their recent peak, right? 96% revenue growth, right?