Palantir Technologies Inc (NASDAQ:PLTR) shares are under pressure on Wednesday. RBC Capital Markets released a cautious report. Here’s what you need to know.
- Palantir Technologies stock is taking a hit today. What’s behind PLTR decline?
RBC Warns On Valuation And Slowing Government Data
RBC analyst Rishi Jaluria kept a $90 price target on the stock and highlighted three issues that stand out heading into the quarter. First, Palantir’s valuation remains extremely rich, trading at roughly 50 times expected 2026 revenue and 35 times 2027 estimates.
Second, RBC’s government‑spending tracker shows a second straight quarter of declining contract value, a worrying trend given that geopolitical instability would normally boost demand.
Third, the firm remains unconvinced that Palantir’s commercial momentum can hold up in the face of intensifying competition.
Government Contract Weakness Raises Red Flags
RBC’s proprietary tracker, which analyzes USAspending.gov data, shows Palantir’s quarterly contract value falling to $43.9 million in the first quarter from $65.9 million in the fourth quarter. Net new contract value was also negative for the second quarter in a row.
Jaluria noted that the lack of acceleration is surprising, which would typically act as a tailwind for defense‑oriented software providers.
Retail Investors Are Growing More Skeptical
RBC also analyzed retail investor questions submitted through Palantir’s Say Technologies platform and found a noticeable shift in sentiment. Questions about stock splits and dividends remain the most common, reflecting frustration that Palantir is sitting on $7 billion in cash without returning any to shareholders.
Meanwhile, questions referencing Anthropic, Maven and Michael Burry jumped sharply, suggesting retail investors are increasingly focused on competitive threats, short‑seller pressure and whether the Department of Defense’s Maven Smart System designation is already baked into guidance.
RBC’s channel checks also point to unease on the commercial side. The firm said some enterprise customers are discussing churn, and competition from Microsoft, Databricks, Snowflake, OpenAI and Anthropic is becoming harder to ignore.
Valuation Remains A Major Overhang
Palantir continues to trade at the highest valuation in RBC’s entire SaaS coverage universe. It is the only software company in the group trading above nine times expected 2027 revenue, compared with a sector median of just over three times. Jaluria wrote that even though Palantir’s growth outlook is stronger than peers, the current valuation is difficult to justify.
PLTR Shares Are Dropping
PLTR Price Action: Palantir shares were down 2.93% at $137.04 at the time of publication on Wednesday, according to Benzinga Pro.
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