Stock Market Today, Nov. 3: Palantir Falls After Q3 Results as Valuation Stays in Focus

Palantir Technologies (NASDAQ:PLTR), an AI-powered defense and enterprise data analytics platform, closed at $175.40, down 1.65%. The stock fell after it announced third quarter results on Nov. 2, and investors are watching U.S. commercial bookings and international growth next.

Trading volume reached 52.4 million shares, coming in about 66% above its three-month average of 31.5 million shares. Palantir Technologies IPO’d in 2020 and has grown 1,746% since going public.

How the markets moved today

The S&P 500 (SNPINDEX:^GSPC) rose 0.36% to 7,569, and the Nasdaq Composite (NASDAQINDEX:^IXIC) gained 0.83% to 25,372. Among enterprise software and AI-driven data analytics for government and commercial customers peers, C3.ai (NYSE:AI) closed at $11.54, -0.09%, and BigBear.ai Holdings (NYSE:BBAI) closed at $2.53, -1.94%, showing mixed sentiment.

What this means for investors

On Tuesday, Nov. 3, Wall Street analysts are weighing Palantir’s future earnings, as the company reported remaining performance obligations (RPO) of $4.9 billion in the third quarter, the same figure as Q2. RPO represents the total value of contracted revenue that Palantir has promised to deliver in the future but has not yet recognized as revenue. The figure remaining unchanged suggests future sales may stagnate, contributing to Palantir’s share price decline.

Adding fuel to the fire is the company’s Q3 total contract value (TCV) growth of 11% year over year. In Q2, TCV rose 153%. TCV represents the total potential lifetime revenue of all customer agreements, and a drop here further points to a future sales slowdown. This, flat RPO, and an elevated share price valuation, as the stock hovers around a forward earnings multiple of 86, combined to send the stock down.

Yesterday, Palantir reported revenue above $2 billion for the first time and raised 2026 sales guidance to $8.53 billion. In addition, its U.S. commercial revenue soared 148% year over year to $984 million, surpassing its U.S. government revenue for the first time in a sign businesses are flocking to Palantir’s artificial intelligence solutions.

While the company’s Q3 performance was excellent, it’s Palantir’s future that Wall Street is concerned about today.

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Robert Izquierdo has positions in C3.ai and Palantir Technologies. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool recommends C3.ai. The Motley Fool has a disclosure policy.

Stock Market Today, Nov. 3: Palantir Falls After Q3 Results as Valuation Stays in Focus was originally published by The Motley Fool