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AI company Palantir (Nasdaq: PLTR) had another strong quarter, easily beating Q3 earnings and revenue estimates and lifting its guidance for the full fiscal year.

However, Palantir stock opened some 7% lower on Tuesday, despite the robust results. It likely had to do with profit-taking and concern about the stocks’ lofty valuation during a period of high market valuations in general and an AI bubble.

The stock has been on a heater over the past three years, returning 340% in 2024, the best among large-caps, and 154% year-to-date in 2025. The massive surge has lifted its stock price to $190 per share. Its P/E ratio has also gone into the stratosphere, trading at 623 times earnings with a forward P/E ratio of 217.

Palantir had more ridiculous year-over-year growth in Q3. Here are the key results.

• Revenue: $1.81B, up 63%. This beat estimates of $1.09B.
• U.S. revenue: $883M, up 77%.
• Income from operations: $393M, up 33%.
• Net income: $476M, up 40%.
• Earnings: 18 cents per share, up from 6 cents per share.
• Adjusted earnings: 21 cents per share, up from 10 cents per share. This beat estimates of 17 cents per share.

Palantir is one of the leading AI companies, providing software that allows large organizations to gather and consolidate data and develop AI models to deploy the data effectively.

It has two major divisions, serving governments and companies. In Q3, U.S. government revenue grew 52% to $486 million, while U.S. commercial revenue grew 121% to $397 million.

“Our business generated $1.2 billion in revenue for the third quarter of the year, a new record in our more than twenty-year history, representing an accelerating and otherworldly growth rate of 63% over the same period the year before,” Palantir CEO Alex Karp said. “We also generated a staggering $476 million in profit this past quarter, again a record in our company’s history.”

Raising its guidance

Palantir has government contracts with the Department of Defense, the FBI, CIA, Homeland Security, ICE, Customs and Border Protection, the IRS, and Social Security, among others. Its commercial clients include Walmart, Apple, Amazon, ExxonMobil, and CVS, among many others.

Palantir is calling for revenue of between $1.327 and $1.331 billion in Q4, which would be up 13% from Q3. Adjusted income from operations is expected to be $695 – $699 million, which would be up from about $601 billion in Q3.

For full year 2025, Palantir raised its guidance, again, after doing so in the previous quarter. It now anticipates annual revenue of $4.396 to $4.400 billion, up from $4.142 to $4.150 billion.

U.S. commercial revenue guidance was raised to $1.433 billion, marking a growth rate of 104%. Previously, the guidance was for $1.302 billion. Also, adjusted income from operations guidance was lifted to between $2.151 and $2.155 billion, up from a range of $1.912 to $1.920 billion. Further, adjusted free cash flow guidance is $1.9 to $2.1 billion, up from $1.8 to $2.0 billion.

“Wrong at every price”

Palantir stock got a slew of price target upgrades from Wall Street analysts, at least eight of them as of mid-morning Tuesday, according to The Fly. Among the biggest upgrades were Morgan Stanley, which boosted it by $50 to $215 per share, and BofA, which raised their target by $40 to $255 per share.

Palantir stock had a median price target of $190 per share, which is roughly flat, but that didn’t include this latest round of changes.

In the shareholder letter, Karp took issue with some analysts, saying Palantirʻs “ascent has confounded most financial analysts and the chattering class, whose frames of reference did not quite anticipate a company of this size and scale growing at such a ferocious and unrelenting rate. Some of our detractors have been left in a kind of deranged and self-destructive befuddlement.”

The earnings call also featured more commentary on the quarterly results, its growth, its mission, and financial analysts, among other topics.

“These are not even strong results,” Karp said on the call, according to Investing.com. “These aren’t extraordinary results. These are arguably the best results that any software company has ever delivered. And that’s not hyperbolic, despite what your analyst friends may want you to believe, because they’ve been wrong at every price.”

In the letter, Karp said it has been “difficult for outsiders” to appraise Palantir, “either its significance in shaping our current geopolitics or its value in the vulgar, financial sense.”

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